On March 20, 2020, the Internal Revenue Service issued Notice 2020-18 (the Notice) to provide relief for certain taxpayers to file federal income tax returns and make payments of federal income tax. The Notice expands upon the relief provided in Notice 2020-17, and supersedes Notice 2020-17.
The Notice applies to any “Affected Taxpayer,” which is defined as any person (including any individual, trust, estate, partnership, or corporation) with a federal income tax payment or a federal income tax return due April 15, 2020.
For any Affected Taxpayer, the due date for filing federal income tax returns and making federal income tax payments, in each case, that are due April 15, 2020, is automatically postponed to July 15, 2020. Affected Taxpayers do not have to file Form 4868 or Form 7004 to apply for extensions to file their federal income tax returns. Further, unlike Notice 2020-17, there is no limitation on the amount of the federal income tax payment that may be postponed.
The Notice specifies that relief is available solely for federal income tax payments (including payments of tax on self-employment income) and federal income tax returns due on April 15, 2020, for the Affected Taxpayer’s 2019 taxable year, and federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year. The Notice does not provide any extension for the payment or deposit of any other type of federal tax, or for the filing of any federal information return.
The Notice further provides that, for purposes of calculating interest, penalties, or addition to tax for the failure to file federal income tax returns or pay federal income taxes, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded, but such interest, penalties, and additions to tax will accrue beginning on July 16, 2020.
Several states, including California, North Carolina, Arizona, Indiana, and Maryland, have also adopted guidance allowing the postponement of income tax filings and payments until July 15. Other states are expected to follow suit. Numerous states have also adopted guidance postponing filing and payment dates for sales and other taxes. In some cases, states will also be waiving interest and penalties on late filings or tax payments.
We will continue to provide updates as future tax-related developments emerge.
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