U.S. Income Tax Filing and Payment Deadline Extensions Clarified in Non-Binding IRS Q&A

Tuesday, March 24th, the IRS published a set of Questions & Answers (“Q&A”) to provide guidance to earlier Notices postponing until July 15, 2020, the payment and filing of certain income tax payments and returns normally due on April 15 without incurring interest and penalties. Among the points in the Q&A, which noted at the end of this alert, is not binding on the IRS.

1. The extension applies to:

  • 2019 Federal income tax returns and payments due on April 15, 2020 by any type of taxpayer
  • 2020 estimated Federal income tax payments
  • Self-employment tax
  • Employee contributions for 2019 to IRAs, Health Savings Accounts and Archer Medical Savings Accounts
  • Employer contributions to qualified retirement plans under IRC §404(a)(6) “grace period”

2. Unlike the first IRS notice, there is no limitation on the amount of the postponed payment, whether for the 2019 balance due or the 2020 estimate.

3. If more time is needed to file, taxpayers have until July 15, 2020 to request an automatic extension via Form 4868 (individuals) or 7004 (businesses and trusts). Although payment would be due July 15, an automatic extension pushes the filing deadline to October 15, 2020.

4. The extension does not apply to:

  • The statute of limitations for filing refund claims. For example, April 15, 2020 remains the deadline to file a refund claim for an individual 2016 income tax return filed on or before April 15, 2017.
  • Returns and payments for taxes other than income tax: Information returns, payroll tax, excise tax and estate and gift tax.
  • Fiscal year taxpayers with payment or return filing due dates other than April 15.
  • Returns and payments due before and after April 15, 2020, including filing Forms 1065 and 1120-S for calendar-year taxpayers (due March 15, 2020) and Forms 990 and 990-T for calendar-year nonprofit organizations. The usual extensions to file apply to these taxpayers.

Most states and localities are adopting similar rules. We are tracking these developments.

The IRS has taken the position that taxpayers may not rely on Q&A posted on IRS.gov and it may change guidance provided by Q&A at any time. Accordingly, we recommend clients consult with us before taking or not taking any actions with respect to #1 – 3., as well as to state/local income tax payment/filing dates.

To learn more, please contact one of the attorneys listed below:
Harry T. Lamb (Federal income tax)
Jay R. Wagner (Estates and trust taxation)
Charles F. Harenza (Employee benefits taxation)
Thomas A. Bowen (State and local income tax)
Richard M. Botwright (State and local income tax)
Tamara F. Rose (State and local income tax)
Edward C. Renenger (Employee stock ownership plan taxation)

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.