IRS Releases COVID-19 Payment Relief

Mar 18, 2020 | COVID-19

IRS Releases COVID-19 Payment Relief

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak.

The filing deadline for tax returns remains April 15, 2020, although a six-month extension of time to file may be requested (as in prior years).

The payment relief granted to taxpayers includes:

  • Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
  • Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

With a change in the federal tax payment deadline, it is expected that most state legislatures are likely to follow federal guidelines. While a number of states have announced business and individual income tax return filing extensions and/or late filing/payment penalty relief, we continue to wait for guidance from the Pennsylvania Department of Revenue on whether PA will follow suit.

This is a fluid situation that we continue to monitor alongside our alliance partner, BDO USA. We’ll provide additional updates as more guidance is released.

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