Pursuant to Notice 2020-17, the Treasury Department and the Internal Revenue Service announced that they are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. However, it is important to note that the extension only applies to payment of such taxes, with the filing deadline for tax returns remaining April 15, 2020.
- Individuals can now delay payment of their income tax due for their individual returns originally due on April 15, 2020 until July 15, 2020 for up to $1 million of their income tax payments.
- The $1 million limit applies in the aggregate to an extension for payment of 2019 federal income taxes and to an estimated payment for the first quarter of 2020, both of which are due April 15, 2020.
- This payment relief applies to all individual returns, including self-employed individuals, and all entities (other than C-Corporations), such as trusts or estates with a tax year-end of December 31, 2019.
- IRS will automatically provide this payment relief to taxpayers, with no need to file any additional forms to qualify for this relief.
- For C Corporations, income tax payments may be postponed until July 15, 2020 for up to $10 million of their 2019 tax due. The $10 million limit applies in the aggregate to an extension payment of 2019 taxes and an estimated payment for the first quarter of 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, 2020.
This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax.