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COVID-19, Tax & Assurance Guidance

Treasury Announces 90-Day Extension

Posted on March 18, 2020 by

Sarah Russell

Sarah Russell

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Yesterday we let you know the Treasury has announced they were providing a 90-day extension of time to pay taxes owed for many taxpayers.   Today the IRS has provided some guidance as to what was included in the extension.

What is covered in the 90-day extension of time?

  • The relief is available for income tax payments due April 15, 2020. This includes federal estimated tax payments due April 15, 2020.
  • Non-corporate taxpayers can defer up to $1,000,000 of tax liability until July 15th, this includes both 2019 and 1st quarter 2020 tax payments combined.
  • For individuals, the amount of deferred tax payment is $1,000,000 regardless of filing status. Therefore a tax deferment amount is the same for a single individual and for married individuals filing a joint return.
  • The deferment includes payments of tax on self-employed income
  • Corporations can defer up to $10,000,000 of tax liability until July 15th, this includes both 2019 and 1st quarter 2020 tax combined.
  • The extension of time to pay includes only income tax payments. It does not cover an extension of time to file income tax returns.

What is not included?

  • The notice did not address whether married individuals filing separately would each receive a $1,000,000 deferment.
  • Amounts due in excess of $1,000,000 should be paid by April 15th to avoid potential penalties and interest on underpayment.
  • State filing and payment obligations are not covered by the IRS guidance. Each state is addressing filing and payment obligations at the individual state level.  To date the following states have issued extensions:
    • Michigan, Colorado, Georgia, Maryland, Massachusetts, Ohio, Oregon treasury departments have said they will mirror IRS guidance however there has been no official pronouncements issued yet.
    • California – filing and payments extended until June 15. Includes quarterly estimated tax payments
    • Connecticut – Business returns extended until June 15th, Individuals until July 15th
    • South Carolina – Filing and payments extended until June 1, 2020, for individuals and corporate taxpayers. Quarterly estimates were not addressed
    • Many state treasury departments are closed but monitoring the IRS guidance. We will be monitoring changing due dates as announced.

What does this mean for you?

  • We are still recommending that clients provide information to their CPA as soon as it is available to assure that anyone getting a refund can file and receive their money back, and that those with tax due are able to get an accurate picture of what will be due come July.

The above represents our best understanding and interpretation of the material covered as of the date of this post. Things are moving at a rapid pace, and as such, information is subject to change. This information is provided for informational purposes only and is not intended to be a substitute for obtaining accounting, tax, or financial advice from an accountant.

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Sarah Russell

Shareholder, Tax

As the leader of the firm's tax group, Sarah supports growth-driven domestic and international businesses with tax planning, consulting and compliance.

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