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Postponements of Deadlines for Federal and State Tax Filings and Payment

On March 18th the IRS issued Notice 2020-17, confirming that federal income tax payments for the 2019 tax year otherwise due on April 15th may be postponed until July  15th 2020 without incurring interest or penalties on the amount due.  In addition, the Notice also postponed to July 15th 2020 the due date for quarterly estimated federal income tax payments otherwise due on April 15th.  Earlier statements by government officials had not indicated that the due date for quarterly estimated tax payments would also be extended.

The postponement is limited to tax payments  up to $1,000,000 for individuals and non-corporate taxpayers and up to $10,000,000 for corporate taxpayers payers.  This ceiling applies on a return-by-return basis, so couples filing a joint return are entitled to a maximum postponement of $1,000,000 in taxes otherwise due, and multiple corporations filing a single consolidated return are subject to the $10,000,000 ceiling.

The postponement applies only to federal income taxes (and related self-employment taxes) that are otherwise due on April 15th, and is not a blanket 90-day extension on all income tax payments.

Taxpayers should be aware that they are still required to file their federal income tax returns (or file a request for an automatic extension) by the April 15th 2020 deadline.  Only the payment of the taxes due is postponed.

This extension does not apply to state income tax payments, and taxpayers will need to look to individual states to grant relief.  As of March 18, 2020, California has extended both the payment and filing deadlines that occur March 15, 2020 through July 15, 2020 (e.g., partnership tax returns, individual tax returns, and estimated payments) to June 15, 2020, and is waiving any interest and late payment or late filing penalties that would otherwise apply.  The District of Columbia has extended the real property tax due date for hotels and motels to June 30, 2020.  None of the Illinois Department of Revenue, New York State Tax Department, Texas Comptroller, or Virginia Department of Taxation have extended filing or payment deadlines for any tax returns.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 79
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About this Author

Hepworth, Associate, Sheppard Mullin
Associate

Justin Hepworth is an associate in the Tax and Estate Planning Practice Group in the firm's Orange County office.

Justin's practice focuses on tax transactional and controversy matters. He assists clients with multistate income, franchise, sales, and transfer tax issues. He advises on audit defense, voluntary disclosure agreements, unclaimed property planning, and other controversy and compliance matters. He has extensive experience handling nexus issues, sales tax exemption issues, state research and development credits, unitary business...

714-424-8293
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