Earlier this year, the IRS issued Notice 2020-23 and supplemental guidance providing extensions to July 15, 2020, for any individual, fiduciary or corporation with a return or payment due between April 15, 2020, and July 15, 2020. Notice 2020-23 expanded the automatic extension to include the second quarter estimated tax payment and fiscal year income tax returns and payments due on or after April 15, 2020, and before July 15, 2020.
On March 27, 2020, Governor Whitmer issued Executive Order 2020-26, which automatically extended certain deadlines for filing and paying state and city income taxes in Michigan. The automatic extension generally allowed for returns and payments otherwise due in April 2020 to be filed in July 2020 without accrual of penalty and interest. This three-month extension to file returns and pay taxes generally accorded the same relief provided by the IRS for federal taxpayers with returns and payments due on April 15, 2020 (IRS Notice 2020-17). While Executive Order 2020-26 clearly extended the time to remit quarterly estimated tax payments due for the first quarter of 2020, the Executive Order did not directly address payments due for the second quarter of 2020.
To more fully adopt IRS Notices 2020-17 and 2020-23, and in accordance with Executive Order 2020-26, the Michigan Department of Treasury has extended the due date for all Michigan income-tax returns or payments due between April 15, 2020, and July 30, 2020. The automatic extension is limited to returns and payments due under the Michigan Income Tax Act, and it applies automatically. Furthermore, the Michigan Department of Treasury (the “Department”) issued a notice extending the date for second quarter estimated payments for state income tax. Accordingly, for most filers, the first and second quarter estimated payments are due on July 15, 2020. For certain fiscal filers, any estimated payment due after April 15, 2020, and before July 15, 2020, is due on July 15, 2020.
With regard to any extension authorized by Executive Order 2020-26 or the Department’s notice, penalty and interest will not accrue for the period during which the extension is automatically effective. Penalty and interest for late filing of the return will not accrue between April 15, 2020, and July 15, 2020, for most individuals and fiduciaries and, likewise, will not accrue between April 30, 2020, and July 31, 2020, for most corporations. The suspension of penalty and interest is limited, however, to the automatic extensions authorized under Executive Order 2020-26 and the Department’s notice; penalty and interest will continue to accrue for taxes otherwise owed by any taxpayer.
Click here to read the Department’s notice.
Additional information can be found at www.michigan.gov/taxes.
Please contact Sean Cook
, Jay Kennedy
, William Lentine
, Jeffrey Segal
or a member of Warner’s Tax Law Practice Group if you have any questions.