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Federal Relief for Taxpayers Affected by Ongoing COVID-19 Pandemic

In much anticipated news, the IRS has released Notice 2020-17 on March 18, 2020 which discusses the practical application of the Federal relief for taxpayers Treasury Secretary Steven T. Mnuchin revealed the morning of March 17, 2020.

PAYMENTS DUE APRIL 15, 2020 EXTENDED

This notice defines that any person with a Federal income tax payment due April 15, 2020 is affected by the COVID-19 emergency for purposes of this relief. As such, for these Affected Taxpayers, the due date for making Federal income tax payments, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020.

The Applicable Postponed Payment Amount is as follows:

1. Up to $10,000,000 for each consolidated group (as defined in 1.1502-1) or for each C corporation not joining in a consolidated return.
2. Up to $1,000,000 for all other taxpayers regardless of filing status.

For payments due April 15, 2020 in excess of the thresholds listed above, amounts should still be remitted on April 15, 2020 to avoid any interest, penalties and additions to tax from accruing.

The Applicable Postponed Payment Amount does include payments of tax on self-employment income. This relief applies to payments due on April 15, 2020 related to the 2019 taxable year, as well as Federal estimated income tax payments for the 2020 taxable year. While this is an extension of payment without penalties and interest, it is not an extension of time to file. Taxpayers will still need to file returns, or extensions, as applicable for the April 15, 2020 tax deadline.

Note that for Affected Taxpayers, interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020.

We will continue to monitor the news and add any new developments that will impact you to this blog.

Contact the Richey May & Co. Tax Team with any questions you may have.