US TAX UPDATE: Extension of April 15, 2020 Tax Payment and Filing Deadlines

On March 20th , US Treasury Secretary Steven Mnuchin announced that the tax filing due date of April 15, 2020 will be moved to July 15, 2020 giving people and businesses more time to file. This change is in line with the automatic extension for US Federal Income Tax Payments from April 15, 2020 to July 15, 2020 for taxpayers as a response to COVID-19.

In addition to automatically extending the tax filing due date, IRS Notice 2020-18 replaces the previously issued Notice 2020-17 and explicitly clarifies the following:

  • The due date for filing Federal tax returns and making Federal income tax payments otherwise due April 15 is automatically postponed until July 15 for Affected Taxpayers. No Form 4868 or Form 7004 is required.
  • An Affected Taxpayer is defined as any individual, a trust, estate, partnership, association, company or corporation with a Federal income tax payment or Federal income tax return due April 15.
  • There is no limitation on the amount of the payment that may be postponed.
  • This notice applies solely to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020 (in respect of an Affected Taxpayer’s 2019 taxable year) and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020 (for an Affected Taxpayer’s 2020 taxable year).
  • No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any Federal information return.

In addition, on March 19th, Senate Majority Leader McConnell introduced the Coronavirus Aid, Relief and Economic Security (“CARES”) Act which provides an extensive series of measures impacting both businesses and individuals. As the CARES Act is quite comprehensive, we will provide a specific tax update on the CARES Act once it is passed into law. The Senate is scheduled to vote on this again on Monday March 23.

At the time of writing, most states have still not announced their relief measures. However, many states have indicated that they will follow the IRS measures. Of the states that have announced relief measures, we have seen extensions range from June 1 to July 31. Because the federal announcements and legislation is changing from day to day, we anticipate that once federal legislation is passed, the states will likely align to at least the IRS relief legislation and various updated deadlines.

During the early days of the COVID-19 pandemic, MNP will send regular email updates on government programs to address the pandemic. For more insights, visit MNP COVID-19 Business Advice Centre – a dedicated microsite to providing information and practical insights on how to manage through the impact of COVID-19.

For more information, contact your local MNP Advisor or visit MNP.ca.

Source: MNP

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