Federal and State Tax Filing and Payment Extensions Explained

As we alerted you last month, the April 15 federal tax payment deadline and the federal tax filing deadline have been extended to July 15. During this time, the IRS is also waiving interest and penalties. These extensions were designed to allow Americans to focus their attention on their families, communities, and businesses during this challenging time.

While these extensions offered a measure of relief for many taxpayers, they have also prompted a number of questions which the Treasury and the IRS have been in the process of clarifying. The Treasury recently issued two notices (Notice 2020-18 and 2020-20) to provide guidance for various April 15 filers. Since these notices can be a bit technical, below is a series of frequently asked questions we’ve been receiving from our clients.

For which taxpayers do the July 15 tax filing and tax payment extensions apply?

These extensions are applicable for filing federal income tax returns and making federal income tax payments for the following filers:

  • Individuals
  • Trusts and estates
  • Partnerships
  • Associations
  • Companies and corporations

Which tax filings are included in the July 15 extension?

The following filings are considered to be automatically extended until July 15, 2020:

  • Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
  • Form 1041, 1041-N, 1041-QFT
  • Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
  • Form 8960
  • Form 8991
  • Form 709

Were the non-profit Form 990s included in the July 15 extensions?

Forms 990 and 990-PF were not included in the extension. However, Form 990-T is eligible for the extension.

Do I need to file for an extension to July 15?

Taxpayers do not need to file Form 4868, 7004, 8868, or 8892 to receive the extension to July 15. However, if a full extension is necessary, taxpayers should file Form 4868, 7004, 8868, or 8892 as in the past. No interest, penalty, or additional tax for failure to file shall apply to the period between April 15, 2010 and July 15, 2020; these will begin again on July 16, 2020.

Does the July 15 extension also include tax payments for 2019 that were due April 15, 2020? What about Q1 2020 estimated tax payments that would normally have been due April 15?

Federal income tax payments due on April 15, 2020 can be deferred by all taxpayers to July 15, 2020 without penalties and interest. All taxpayers, including individuals, trusts and estates, corporations, and other non-corporate tax filers, as well as those who pay self-employment tax, are eligible for this deferment.

At the time writing, no guidance has been provided for how to handle tax payments due on May 15, 2020 or June 15, 2020.

How will this affect Q2 estimated tax payments?

At the time of writing, no guidance has been provided regarding changes in the deadlines for Q2 estimated tax payments. Please note that without additional deferment options for Q2 tax payments, it is possible that a taxpayer’s second quarter estimate could be due prior to the original first quarter tax payment (see the previous discussion on deferred April 15, 2020 tax payments). Please stay tuned for additional guidance.

Does the July 15 extension apply to payroll and excise taxes?

No, this emergency relief is not applicable to payroll or excise taxes.

Which non-April 15 due dates are affected by this extension?

At the time of writing, the IRS has not acknowledged any adjustments to filing or payment requirements other than those due on or before April 15, 2020. We recommend that our clients who fall into this category proceed as they normally would until such time as an update is provided.

How does this extension affect fiscal year filers?
The impact to fiscal year taxpayers is the same as calendar year taxpayers, as the deferment applies to any taxes due on April 15, 2020 regardless of a taxpayer’s year-end.

Have state tax deadlines also been extended to July 15?

As we reported in late March, the full state tax filing deadline picture is more complex than the federal. Each state is in a different place in its own decision-making process. You can view a summary of each state’s tax activity related to COVID-19 here. This data was compiled as of April 6, 2020.

Even though many states have instituted tax filing deadline extensions – including Pennsylvania – there are a number that have not yet made the distinction between the filing deadline extension and the payment deadline extension (New Jersey is one). Arguably, without legislation to extend either the tax return and/or estimated payment dates, the due dates for estimated payments and/or returns in these states are still April 15. For this reason, we continue to suggest doing as much work as possible before April 15, in the event that some states do not extend their deadline. We will continue to keep you updated as this picture evolves.

If you need assistance with this or any other COVID-19 related matters, please contact your Kreischer Miller relationship professional or any member of our team. We also continue to update our COVID-19 Resource Center, which you can access here.

Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.