The IRS issued Notice 2020-17 to confirm the relief provisions noted by Treasury Secretary Steven Mnuchin at a press conference on March 17, 2020 that individuals can defer income tax payments up to $1 million of their 2019 tax due. This relief extends the payment due date for all individual returns, trusts, and estates with a federal income tax payment due, including the first estimated tax payment, on April 15, 2020 to July 15, 2020.
The notice also provides payment relief for C-Corporations to defer up to $10 million of income tax payments from April 15, 2020 to July 15, 2020. The relief does not extend to other required federal tax payments due April 15, 2020. Payments due to various states should be addressed as well, since some, but not all states are issuing relief provisions.
Interest and penalty will not apply to payments during the postponement period of April 15, 2020 through July 15, 2020. Interest and penalty will accrue on unpaid amounts beginning on July 16, 2020.
The relief does not extend the filing requirements. Therefore, we recommend that you continue to gather your tax documents as you normally would to file your individual income tax return by April 15, 2020, or if you need additional time to gather your information, contact our office to request we file an extension on your behalf. If you are due a refund, you should file right away to request that refund. If you owe, you should still file your return, assuming you have all your information. You can defer payment for the balance due on that return and the first estimated tax payment until July 15, 2020. We recommend that you plan to make the June 15 estimated tax payment as scheduled.
We will continue to monitor this developing situation and provide updates if significant changes are announced. Please contact our office if you have questions or need additional information.