The US Treasury Department and the Internal Revenue Service (IRS) announced on 21 March that the federal income tax filing due date is automatically extended from 15 April to 15 July.

Taxpayers will also have until 15 July to pay Federal taxes without penalties and interest.

UPDATED: The IRS have confirmed that the above automatic extension will now apply to Federal gift or generation skipping taxes due on 15 April.

What has changed? 

In a response to the coronavirus (COVID-19) pandemic, any person with a federal income tax payment or income tax return due 15 April 2020 is affected by the COVID-19 emergency for the purposes of the tax relief, outlined in the IRS Notice 2020-18, and is an “Affected Taxpayer”.

For an Affected Taxpayer, the due date for filing Federal income tax returns and making Federal income tax payments due 15 April 2020, is automatically postponed to 15 July 2020.  The extension is automatic and there is no limitation on the amount of the payment that may be postponed.

The relief only applies to Federal income tax payments (including payments of tax on self-employment income) due on 15 April 2020 and will therefore include Federal taxes due for 2019 tax year and first quarter 2020 Federal estimated income tax payments. There has been no extension to the due date of the second quarter 2020 estimated tax payments that are due on 15 June 2020.

No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.

While Notice 2020-18 is unclear on this point, informational returns, such as Form 8938 (Statement of Specified Foreign Financial Assets) which are generally, attached to and filed with a taxpayer’s annual return, would also, presumably, be subject to the extended deadline of 15 July 2020.

The US Estate and gift tax regimes apply to the transfer of property and the relief given, under Notice 2020-18 only applies to Federal income tax.

UPDATED: Notice 2020-18 has been amplified to allow an automatic extension to 15 July for the filing of Forms 709 (United States Gift and Generation-Skipping Transfer Tax Return) and making payments of Federal gift and generation-skipping transfer tax.

Some states are following the IRS’s lead but taxpayer’s will have to review their state position.

Deloitte's view:

We are glad to see the authorities have taken this step in order to support the taxpayers in this extraordinary situation.

If you would like to discuss more on this topic, please do reach out our key contacts below

Read more about the Deloitte US tax Services.

Key contacts

Geoffrey Leys - Director, Global Employer Services

Geoffrey is a Director in our Global Employer Services (GES) Practice and leads the Individual US Tax Services group in Switzerland. He has advised international organisations and their employees on the employment tax, personal tax and HR implications of global relocations and workforce mobility for almost 20 years, with particular focus on the complexities of taxation of US citizens working abroad and a strong understanding of the interactions with Swiss individual taxation. Geoff holds a Bachelor of Science degree in Business Finance and Economics from the University of East Anglia and holds qualifications in both UK and US taxation.

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Alexander Saluveer - Senior Manager, Global Employer Services

In a career spanning more than 20 years, Alex has worked in the field of international expatriate tax, reward consulting and global mobility in London, New York, Paris, Sao Paulo and Geneva. He has widespread experience in US individual taxation, having worked with US executives and high net worth individuals throughout his career. Alex has led global as well as country specific engagement teams within a varied client base providing advice in respect of individual tax matters as well as employer responsibilities. He has worked extensively in assisting organisations manage international incentive and deferred compensation plans. Alex holds a MA Degree from the University of Cambridge and is UK and US tax qualified.

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Andrew Morgan - Senior Manager, Global Employer Services

Andrew is a Senior Manager in within the Global Employer Services (GES) practice and has over 15 years experience in working with US expatriates and high net worth individuals in Switzerland and the UK. Andrew has significant experience with the payroll, HR and Global Mobility related aspects of international assignments. Andrew holds a Bachelor of Science degree in Economics and Politics from the University of Sheffield, UK and is US and UK tax qualified.

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