On Wednesday March 18, the Internal Revenue Service (“IRS”) released guidance regarding an automatic 90-day extension for federal tax payments via Notice 2020-17. The previous due date for making federal tax payments of April 15, 2020, has been moved instead to July 15, 2020. The belief is this will provide individuals and businesses increased flexibility for individuals and businesses in the short term. Below are some highlights of the effects of 90-day extension for federal tax payments:

Federal Tax Payment Relief:

  • This automatic extension for payment applies for up to $1 million of the 2019 amount of taxes due for to all individual returns.
  • The relief applies to self-employed individuals who owe self-employment tax.
  • The relief also applies to trusts and estates.
  • C-Corporations have their payment deadline extended until July 15, 2020, as well. This applies to up to $10 million of their 2019 tax due.
  • Interest, penalties, and additions to tax for failure to pay will not accrue during this 90-day period. However, this does not apply to amounts owed in excess of the limitations mentioned above ($1 million for individuals; $10 million for C-Corporations).

Members of the Congress have been working on legislation to extend the federal tax filing deadline as well. However, the filing deadline for individual income taxes currently remains April 15, 2020. If you will need more time to file your federal income tax return, consider filing an extension before April 15, 2020. The relief outlined above only applies to federal income taxes, and not state or other federal tax deposits or payments (i.e. excise taxes).

If you have any questions regarding Notice 2020-17, or any other federal, state, or local tax matters, contact D. Scott Robinson and L. Maverick Flowers at BHGR at 303-402-1600.

Authors: L. Maverick Flowers

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