We finally received some additional reprieve from the Federal government. The Treasury Department and Internal Revenue Service announced on Saturday that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
As we mentioned in our letter last week, taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest (IRS Notice 2020-17). That notice only extended the payment date of amounts owed by individuals of $1 million or less in the aggregate and $10 million or less in the aggregate owed by corporations from April 15, 2020 to July 15, 2020. This new notice removes the dollar limit previously stated under Notice 2020-17 and makes the relief available regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868. Businesses who need additional time must file Form 7004.
The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
"Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically," said IRS Commissioner Chuck Rettig. "Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I’m incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment."
As we reiterated in our first letter on this topic, this extension of time to file and time to pay is for federal returns and payments only. Some states have followed suit, including Iowa (which has extended the April filing and payment date to July 31, 2020), but we have not received any notice that the State of Nebraska will be automatically extending the due date or payment date. Additionally, the Treasury and the IRS have made no mention of extending the second quarter individual estimated tax payment for 2020, which is due June 15, 2020. We will continue to keep you posted as we receive more information.
As always, feel free to contact us if you have any questions.