TO OUR FRIENDS AND CLIENTS:
On Friday, March 20th, the Treasury Department notified taxpayers that the filing deadline for 2019 tax returns shall be extended ninety days. Therefore, returns with a due date of April 15, 2020 need not be filed or extended until July 15, 2020.
On Wednesday March 18th, the IRS issued Notice 2020-17, which now gives taxpayers guidance on the 90-day federal tax payment extension due to the Covid-19. On Tuesday we received written confirmation that the payment delay was available to people who owe $1 million or less and corporations that owe $10 million or less.
The IRS Notice provides the following guidance:
· The 90-day extension deadline for payment has been extended to July 15, 2020. Individuals filing their 1040 tax return for 2019 may defer payment of $1 million dollars. (Applies to Individuals or married couples)
· The extension of the payment due date applies to taxpayers’ 2019 income taxes due on April 15th. The tax payment includes federal estimated income tax payments that were due for the first quarter of 2020 for this current tax year.
· The 2019 and first quarter estimated payment are aggregate. Therefore, if you owe $900,000.00 for 2019 and your estimated payment for the first quarter for 2020 is $200,000.00 you may only defer $100,000.00 of the $200,000.00 1st quarter 2020 estimated payment. Please do not assume that the June 15th estimated tax payment will also be extended.
· Income taxes owed by trusts and estates on April 15th appear to be included in the 90-day payment extension.
· Most important the extension of payment does not apply to 941 payroll taxes. This deferral also will not apply to gift, estate, excise, or state income taxes.
Each State has total discretion whether to enact some type of deferral but we encourage clients to pay sales taxes and all other state taxes until advised by each state. We will update clients as written guidance is provided.
The IRS has NOT offered any relief to businesses that may have missed a March 16th deadline for some returns. Timely filing compliance is essential.
THE EXTENSION IS SOLELY FOR PAYMENT NOT FILING! Taxpayers must timely file Form 4868 if they wish to have the automatic six-month extension to October 15, 2020.
Our churches, synagogues, mosques are closed but our loving God walks with us! We must continue:
With your acts of kindness, continue to allow humor to lighten the burden of your tender heart; continue in a society dark with cruelty to let the people hear the grandeur of God in the peals of your laughter; and continue to let your eloquence elevate the people to heights they had only imagined
Maya Angelou
