To help our clients navigate the coronavirus (“COVID-19”) crisis, Keane & Beane is providing numerous Legal Alerts on a variety of issues. The information contained in this Legal Alert is applicable as of today, April 16, 2020. Many situations are so fact specific and nuanced that this Legal Alert only addresses some of the more pressing ongoing issues. The discussion below is therefore general and does not address all considerations and specific analyses that may need to be undertaken prior to taking action.
On March 18, 2020, the United States Treasury Department postponed the due date for certain Federal income tax payments from April 15, 2020 until July 15, 2020.
On March 20, 2020, the Treasury Department provided additional relief, postponing the due date from April 15, 2020 until July 15, 2020 for individuals and businesses to file federal income tax returns and make Federal income tax payments due April 15, 2020.
On March 27, 2020, the Treasury Department provided expanded relief, postponing certain Federal gift and generation-skipping transfer tax return filings and payments until July 15, 2020.
Most recently, on April 9, 2020, the Treasury Department and Internal Revenue Service issued Notice 2020-23, which expands this relief to additional tax returns, tax payments and other actions. As a result, the extension until July 15, 2020 generally now applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020 and before July 15, 2020. This includes individuals, corporations, trusts, estates and other non-corporate tax filers.
The full text of IRS Notice 2020-23 can be accessed here. In summary:
- The extension of filing obligations and payment obligations extended until July 15, 2020 include:
- Individual income tax payments and return filings (eg., IRS Form 1040);
- Corporate income tax payments and return filings (eg., IRS Form 1120);
- Partnership return filings (eg., IRS Form 1065);
- Estate and trust income tax payments and return filings (eg., IRS Form 1041);
- Estate and generation-skipping transfer tax payments and return filings (eg., IRS Form 706);
- Information regarding beneficiaries acquiring property from a decedent (eg., IRS Form 8971);
- Gift and generation-skipping transfer tax payments and return filings (eg., IRS Form 709);
- Estate tax payments of principal or interest due as a result of an election made for the payment of the estate tax where the estate consists largely of interest in a closely held business;
- Exempt organization business income tax and other payments and return filings (eg., IRS Form 990-T);
- Excise tax payments on investment income and return filings for private foundations (eg., IRS Form 990-PF); and
- Quarterly estimated income tax payments (i.e., individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020 can wait until July 15 to make that payment without penalty).
2. The relief is automatically postponed to July 15, 2020. Taxpayers do not have to file any extension forms or call or send a letter to the IRS to obtain an extension to that date.
3. If taxpayers need additional time to file beyond July 15, 2020, they must file the appropriate extension form by July 15, 2020. However, the extension date will not extend beyond the original extension date. For example, if an individual files an extension on July 15, 2020 to pay his or her income taxes, the due date for the return will only be extended until October 15, 2020, the due date when an individual requests an extension on April 15. Additionally, any extension granted will not extend the time to pay federal income tax. Thus, taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020 deadline to avoid additional interest and penalties.
4. The period between April 1, 2020 and July 15, 2020 will be disregarded in the calculation of any interest, penalty or addition to tax for failure to file forms or make payments postponed by the Notice.
Prior Keane & Beane Covid-19 Legal Alerts
Keane & Beane, P.C. has prepared several Legal Alerts concerning the Federal and State response to COVID-19 and the impacts on employers and local governments. Our Legal Alerts are available here. Given the fluidity of this rapidly developing situation, we encourage you to reach out to a member of the Keane & Beane Trust and Estates Practice Group with questions regarding specific situations. We note that there are legislative developments in Congress and New York which impact each of these questions, and which we are closely monitoring. Because of the frequent developments, you should consult counsel regarding specific questions. For questions on trust and estates issues contact Steven A. Schurkman, Jeffrey Cohen, David Glasser, Patrick J. O’Sullivan, Christopher Aventuro, Sarah A. Steckler, Zachary D. Oliva or any other attorney in our Trust and Estates Practice Group.