Recently, the U.S. Department of Treasury released Notice 2020-18 (the “Notice”) in response to President Trump’s pandemic declaration on March 13, 2020, that COVID-19 warranted an emergency under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. By issuing the Notice, the Treasury is providing relief from tax deadlines to Americans who have been adversely affected by the national emergency.
The Notice postpones for 90 days the filing and payment due date for any person with a federal income tax return due April 15, 2020. The term “person” includes an individual, trust, estate, partnership, association, company or corporation. The usual due date of April 15, 2020 for filing federal income tax returns and making federal income tax payments is now automatically postponed to July 15, 2020. The postponement applies to any federal income tax payments due by April 15, 2020 and includes income taxes, quarterly estimated income-tax payments and self-employment taxes. No extension is provided in the Notice for the payment or deposit of any other type of federal tax or for the filing of any federal information return. There is no limitation on the amount of the payment that may be postponed. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.
The application of interest and penalties on unpaid taxes (and delayed filings) will be suspended for proper deferrals under the Notice for the period beginning April 15, 2020 and ending July 15, 2020.
In an Information Release announcing the Notice (IR-2020-58), the IRS indicated that individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.
The Information Release also urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
At the time of this writing, the Michigan Department of Treasury has not postponed the April 15, 2020 due date for filing Michigan income tax returns. We will report on expected Michigan guidance as it develops.
For more information regarding federal tax issues, please contact William Lentine
, Jay Kennedy
, Sean Cook
, Jeffrey Segal
or your Warner relationship attorney. The Tax Law Practice Group will continue to monitor federal and state tax issues as they continue to develop.