Reed Smith Client Alerts

In recent weeks, the Treasury Department and the IRS have taken measures to try to ease the strain that the coronavirus (COVID-19) has placed on individuals and businesses across the country. This Alert summarizes some of the key federal tax provisions contained in the COVID-19 guidance. A common theme throughout the responses discussed below is the focus on providing liquidity to the capital markets and providing short-term financial relief to taxpayers.

Relief for Federal Tax Payments Due on April 15, 2020 (IRS Notice 2020-17) 

On March 13, President Trump issued an emergency declaration instructing the Treasury to provide relief from tax deadlines for Americans adversely affected by COVID-19. In response, the IRS issued Notice 2020-17, which extended the federal income tax payment deadline for individuals and corporations affected by the COVID-19 emergency by 90 days.

The Secretary of the Treasury has determined, for purposes of Notice 2020-17, that any individuals or corporation with a federal income tax payment due April 15, 2020 is affected by the COVID-19 emergency. These affected taxpayers will have until July 15, 2020 to make payments. Further, the postponed payment is capped at $1 million for individuals, regardless of filing status, and $10 million for corporations.