Coronavirus (COVID-19) 90-Day Tax Filing Deadline and Payment Deferral FAQs
Find more information here on Notice 2020-18 in which the IRS provides FAQs on the tax payment and filing deferral for coronavirus (COVID-19).
Here are some FAQs about Notice 2020-18. The notice provided a 90-day extension to the deadline file and pay tax returns or tax payments due on April 15. The guidance was issued because of the coronavirus (COVID-19) pandemic.
Q. What is the IRS doing to help taxpayers and businesses who are impacted by the coronavirus (COVID-19) pandemic?
A. The Treasury Department and IRS announced on Wednesday, March 18th, 2020, that certain taxpayers and businesses are allowed an extra 90 days (until July 15, 2020) to pay their 2019 tax liability. The Treasury Department announced on Friday, March 20, 2020 that the April 15, 2020 filing deadline was automatically extended to July 15, 2020.
Q. Who is eligible for the tax filing and payment deferral?
A. Any person with a federal income tax return or payment due on April 15, 2020 is eligible for relief. Forms eligible for the July 15, 2020 postponement include:
- Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS
- Form 1041, 1041-N, and 1041-QFT
- Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
- Form 8960
- Form 8991
Relief also applies to section 965(h) installment payments due on April 15, 2020. Those payments are postponed to July 15, 2020.
Q. Who is not eligible for the tax filing and payment deferral?
A. The due date for filing Form 1040X for 2016 was not postponed. Because the IRS did not extend the due date for amended returns, it is unlikely they would postpone the due date for protective claims. Form 1040X and protective claims for tax year 2016 would be due April 15.
Calendar year returns for partnerships (Form 1065 and 1065-B) and S corporations (Form 1120S) were due March 16, 2020 and that deadline was not postponed. Income from these passthrough businesses flows through to their shareholders or partners who would be eligible for the 90-day deferral on taxes owed on passthrough income.
Fiscal year filers with a fiscal year ending in 2019 and an original due date of April 15, 2020 are eligible for the July 15, 2020 due date.
Tax returns due on May 15 or June 15 are not eligible for automatic postponement. Payroll taxes are not eligible for postponement. Estate (Form 705) and gift (For 706) tax returns are not eligible for postponement.
Relief does not apply to any type of information return (such as Form W-2, Form 1099 series, etc.).
Q. If I request an automatic extension, when is my return due?
A. If you are an individual taxpayer requesting an extension to file Form 1040, you must file Form 4868 by July 15, 2020. Your tax return will be due on October 15, 2020. To avoid interest and penalties, pay estimated tax due with your extension request.
Q. What types of payments does this deferral cover?
A. It covers income tax payments due on April 15, 2020. It also provides relief for interest and the failure-to-pay penalty (FTP penalty). It also covers estimated tax payments (included payments of tax on self-employment income) due on April 15, 2020 for the 2020 tax year.
It does not cover second quarter estimated tax payments due on June 15, 2020. Only the first quarter is postponed. It does not cover the penalty for failure to make estimated tax payments during 2019.
Q. Did the IRS postpone deadlines for contributing to an IRA or make any other changes to retirement deadlines?
A. The deadline for contributing to an IRA for 2019 is extended to July 15, 2020. The deadline for paying any 10% additional tax on early distributions is also extended to July 15, 2020. The deadline for correcting excess deferrals to a work-place based retirement plan remains April 15, 2020.
Q. Did the IRS postpone deadlines for contributing to a health savings account (HSA) or Archer MSA?
A. Yes. The deadline for contributing to an HSA for 2019 is extended to July 15, 2020. The deadline for contributing to an Archer MSA for 2019 is also extended to July 15, 2020.
Q. What if I’m getting a refund? Does this news affect me at all?
A. It should not affect you if you’re receiving a refund. The Treasury Department says you should still expect to receive your refund within the normal time period (9 out of 10 are received within 21 days of electronic filing).
Q. How long is the deferral period?
A. This deferral period will run for 90 days, from April 15 to July 15, 2020.
Q. Do I need to file anything to be eligible to defer my interest and penalties until July 15, 2020?
A. The tax filing and payment deferral itself is automatic when you file and pay by July 15, which means interest and penalties are automatically waived for 90 days and won’t begin to accrue for qualifying taxpayers and businesses until after July 15.
Q. If I already filed my income tax return and scheduled a payment for April 15, can I change the payment date?
A. Yes. See “Stopping scheduled balance due payments with the IRS”
Q. How much of my payment can I defer?
A. There is no limit on the amount of payment due on April 15 that you may defer to July 15.
Q. Am I still required to file my return by April 15?
A. No. The new deadline for tax returns that were due on April 15 is July 15. You must file or request an extension by the new deadline of July 15, 2020. If you request an extension to file Form 1040, your return will be due October 15, 2020.
Q. Does this deferral apply to the first estimated tax payment for 2020 due on April 15?
A. Yes. Tax payment deferral does include the first 2020 estimated tax payment (including estimated self-employment taxes) otherwise due on April 15, 2020. It does not include the second quarter estimated payment due on June 15, 2020.
Q. Does this announcement mean I don’t owe taxes for 2019?
A. No. The deferral only extends the due date for 90 days. Interest and penalties will again accrue on outstanding tax liabilities starting July 16, 2020. The deferral does not exclude or exempt taxpayers from filing a tax return if they are already required to file.
For more information on novel coronavirus COVID-19 tax relief, see “Coronavirus COVID-19 tax relief resources”
Q. What is the People First Initiative?
A. The IRS just released its People First Initiative to temporarily adjust or suspend key compliance initiatives. These compliance initiatives include—
- Installment agreements. Taxpayers may optionally suspend payments due on existing agreements between April 1 and July 15, 2020. The IRS will not default any existing installment agreement during this period. Interest will continue to accrue.
- Offers in compromise. Likewise, taxpayers have the option of suspending payments on existing OICs through July 15, 2020. Also, the IRS will allow taxpayers until July 15 to supply any requested additional information on a pending OIC.
- Audits and collection activities. The IRS will generally not start new field, office, and correspondence examinations. New liens and levies, new passport certifications because of outstanding tax debts, and new delinquent accounts forwarded to private debt collectors are all temporarily suspended. IRS examiners will continue existing audit activities remotely.
- Earned income credit verification process. Taxpayers asked to verify wage or other information have until July 15, 2020 to respond to the IRS. Until that deadline the IRS will not deny EIC for failure to provide information. Taxpayers are encouraged to make every effort to comply with requests or explain why they cannot do so.
Please read the IRS release, IR-2020-59, for full details on the People First Initiative.