Tax and financial advice from the Silicon Valley expert.

What does the Federal tax due date change to July 15, 2020 cover?

The IRS has issued Notice 2020-18 and posted FAQs at the IRS web site explaining what the Federal tax due date extension to July 15, 2020 covers.

The extension doesn’t apply to all federal taxes.  For example, it applies to federal income taxes for income tax returns and tax payments, including estimated income tax payments, due on April 15, 2020, but doesn’t apply for federal payroll tax returns, gift tax returns, estate tax returns or federal excise tax returns or to estimated income tax payments due on June 15, 2020.

The extension also doesn’t apply to the due date of filing amended income tax returns, corporate requests for quick refunds of estimated tax payments, the time for completing retirement account rollovers, or for taking excess deferrals contributed to a 401(k) plan out of the plan (due April 15.)

The extension does apply to contributions for 2019 to IRAs (including Roth IRAs) and Health Savings Accounts (HSAs).

Nothing needs to be done to get the due date extension to July 15, 2020.  The due date has simply been changed.

Penalties for late filing of income tax returns and penalties for late payment of income taxes won’t apply for income tax returns and income tax estimated tax payments otherwise due on April 15, 2020 that are filed and paid by July 15, 2020.

If a taxpayer needs additional time to file its 2019 income tax return beyond July 15, 2020, it can file an automatic extension to file form by July 15, 2020, showing the estimated tax due.  The due date for paying the tax isn’t extended beyond July 15, 2020, and late payment penalties plus interest will apply for 2019 income taxes not paid by July 15, 2020.

If a taxpayer has scheduled an automatic payment of income taxes on April 15, 2020 for an e-filed income tax return, the taxpayer may call IRS e-file payment services 24/7 at 888-353-4537 to cancel the payment.  The IRS recommends that you wait 7 to 10 days after your tax return has been accepted before calling and the request must be received no later than 11:59 p.m. ET two business days before the scheduled payment date.  The taxpayer should then go to www.irs.gov/payments/direct-pay to schedule a payment for July 15, 2020.

Estimated tax payments that were previously scheduled using Direct Pay can be cancelled and rescheduled at www.irs.gov/payments/direct-pay.  You will need the transaction number for the scheduled transaction.

California hasn’t conformed to the federal due date extension yet.  It previously announced a June 15, 2020 extension date.  I expect it will conform to the federal extended due date soon.

If you have a question about this matter, call the IRS, consult with your tax advisor or write to me at mgray@taxtrimmers.com.

Here’s a link to the Notice. https://www.irs.gov/pub/irs-drop/n-20-18.pdf

Here’s a link to the FAQs. https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

Federal tax deadline extended from April 15 to July 15

Treasury Secretary Mnuchin has announced the federal tax deadline for filing 2019 income tax returns and making tax payments has been extended from April 15 to July 15, 2020.

Here is the text of his tweet:

“At @realDonalTrump’s direction, we are moving Tax Day from April 15 to July 15.  All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

California will probably conform to the due date change.  (California previously announced extending the due date to June 15, 2020.)

Tax and financial advice from the Silicon Valley expert.