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The IRS has issued Notice 2020-17, which provides more detail to the remarks made by United States Secretary of the Treasury Secretary Steven Mnuchin on March 17, 2020. The Treasury and the IRS have officially extended the deadline for tax payments due on April 15, 2020.
An odd twist to this relief is that the extension does not apply to the actual due date of the return. If you have a tax return due on April 15, 2020, you must file your return or extension by that date. However, you have an additional 90 days to pay your federal taxes. This 90-day period only applies to the first $10,000,000 for corporations and $1,000,000 for all other taxpayers. Any balances due in excess of these amounts will be subject to interest and penalties.
All payments made by July 15, 2020 will not be subject to any interest or penalties. Interest and penalties will start to accrue on July 16, 2020 for any tax payments not made.
It’s important to note that this extension covers the balance due on your 2019 federal income tax return, as well as the first quarter federal income tax estimate due on April 15, 2020. It does not provide an extension for any other payment due after April 15, 2020. Under the Notice, second quarter federal income tax estimates would still be due June 15, 2020. Also, it is for federal payments only; each state must decide whether it will conform with this payment deadline extension.
Legislation has been introduced to also extend the filing due date as well. We are hopeful that Congress and the Treasury will get on the same page and remove the uncertainties.
We will continue to monitor this provision and keep you updated on any changes. If you have any questions about how this will affect you, please contact your Warren Averett advisor or complete this form to have a member of our team reach out to you.