It’s not often that we receive good news regarding federal income taxes. In the current state of global pandemic crisis, we all could use a little good news. Thanks to the Internal Revenue Service and the Department of Treasury, we are happy to share bit of good news.
In response to the COVID-19 outbreak, the Internal Revenue Service and the Department of the Treasury have deferred the payment deadline from April 15, 2020, to July 15, 2020. Although the payment of estimated tax has been extended, the filing deadline of April 15, 2020 for corporate tax returns, individual tax returns, or extension remains in place.
What does the tax payment extension mean for individuals?
For individuals, the payment deadline is being automatically extended for those 2019 tax bills up to $1 million. This includes individuals, self-employed, estates, and trusts, essentially any filers other than C-corporations. There are no additional forms to complete, and it is not necessary to contact the IRS as this is applied across the board. As a reminder to individuals, the IRS emphasizes that everyone is eligible to request a six-month extension to file their federal return. Utilizing this option can give additional relief.
What does the tax payment extension mean for corporations?
For C-corporations, the tax payment deadline is extended to July 15, 2020, for up to $10 million of the 2019 tax bill.
What about penalties and interest?
Penalties and interest will accrue beginning July 16, 2020, but provided the return is filed by April 15, 2020, and paid by July 15, 2020, no interest or penalties will apply.