The IRS has issued official guidance clarifying that the 90-day extension for payment of taxes does not apply to the March 15 or April 15 filing deadlines. (IRS Notice 2020-17) This means that even though the actual tax payment has been deferred until July 15, 2020, for most taxpayers, they must still file a timely extension request to avoid the late-filing penalty (or, in the case of the missed March 15 filing deadline, request penalty abatement if late-filing penalties are imposed).
Any person with a federal income tax payment due April 15, 2020, who is affected by the COVID-19 emergency is eligible for the following relief:
- Deferral of up to $1 million in aggregate for all taxpayers other than C corporations, regardless of filing status (so the $1 million limit applies to joint filers); or
- Deferral of up to $10 million in aggregate for C corporations (the $10 million limit applies at the consolidated group level if the corporation is part of a consolidated group).
The relief only applies to:
- 2019 income tax payments due on April 15, 2020 (including self-employment taxes); and
- The April 15, 2020, estimated income tax payment due on April 15, 2020, for the 2020 taxable year (including self-employment taxes).
This federal relief is granted under IRC §7508A, which California conforms to. As a result, we believe California conforms to the July 15 payment extension. We have reached out to the FTB for confirmation.
The IRS notice may be viewed at:
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