Relief for Taxpayers Affected by COVID-19

Estate & Succession Planning
March 26, 2020
 

This content in this March 26 First Alert was updated in the March 30 First Alert: Additional Relief for Taxpayers – Federal Gift (and Generation-Skipping Transfer) Tax Returns Automatically Extended.

The United States Department of the Treasury and Internal Revenue Service (“IRS”) released Notice 2020-18¹ to provide the following payment relief to taxpayers affected by COVID-19 ("Affected Taxpayers") with respect to the upcoming tax deadlines:

  • Federal income tax filings due on April 15, 2020, are automatically extended to July 15, 2020.
  • Federal income tax payments due on April 15, 2020, with respect to an Affected Taxpayer’s 2019 taxable year are due July 15, 2020.
  • Federal estimated income tax payments due on April 15, 2020, with respect to an Affected Taxpayer’s 2020 taxable year are due July 15, 2020.
  • The calculation of any interest, penalty, or addition to tax for the failure to pay with respect to such postponed federal income tax payments will be disregarded for the period beginning on April 15, 2020, and ending on July 15, 2020.

An Affected Taxpayer is defined as any person (including, individuals, trusts and estates, partnerships, associations, companies or corporations) with a federal income tax payment due on April 15, 2020. Notice 2020-18 provides that there is no limitation on the amount of such federal income tax payment that is postponed.

Relief is only provided to federal income tax returns and payments that are due on April 15, 2020, and therefore, does not extend the filing date or payment of tax due on any other type of federal tax return or informational return. For extending the filing of a 2019 Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, a taxpayer is required to file either Form 8892 or Form 4868 by April 15, 2020, which extends the time to file a gift tax return to October 15, 2020. Other types of tax returns for which no relief is provided include a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return with a due date (or extended due date) based on the decedent’s date of death, and a Form 1041, U.S. Income Tax Return for Estates and Trusts for any estate or trust that is on a fiscal year and required to file a return.

The federal relief does not apply to state income tax filing dates, income tax payments, estimated income tax payments, school district income tax filings and payments, fiduciary income tax returns, or the calculation of interest, penalty or addition to tax for failure to pay. However, on March 25, 2020, the Ohio legislature passed a bill extending the filing and payment date of state, municipal, and school district income tax returns to July 15, 2020, aligned with federal relief. States that have not already announced extending deadlines will likely implement extensions to adjust to the new federal deadline.
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¹The IRS announced limited relief to Affected Taxpayers in Notice 2020-17, but expanded its relief in Notice 2020-18.


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