On March 20, 2020, the IRS and Treasury extended the tax filing and payment deadline to July 15, 2020 for all 2019 federal income tax returns, and any April 15, 2020 estimated federal income tax payments. This postponement is granted for all federal taxpayers, including individuals and businesses, and will not result in interest or penalties. Associated interest, additions to tax, and penalties for late filing or late payment will be suspended until July 15, 2020. Contrary to prior notices, there is no cap on the amount of tax payment deferral that is available to taxpayers. The Treasury said Saturday that taxpayers aren’t required to file any documentation to take advantage of the delay. The relief announced Friday by the Treasury only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, but not to state tax payments or deposits or payments of any other type of federal tax. However, many states are expected to conform with similar relief. The Treasury and the IRS plan to issue more guidance as needed and continue working with Congress. For more details about the official Federal Tax Day change please visit: https://www.irs.gov/pub/irs-drop/n-20-18.pdf.
April 15, 2020 Deadline Still Applies for FBAR and Other Non-Income Tax Filings
The emergency filing extension is only available for federal income tax returns and, therefore, U.S. taxpayers who are required to file excise tax filing, non-income tax return, or other federal informational return are still subject to the original April 15, 2020 (or other regularly scheduled due date, as applicable). Consistent with existing procedures, taxpayers are allowed an automatic extension to October 15, 2020 for FBAR filings.
Taxpayers Should Plan to Pay Transition Tax Installments as Scheduled
The tax payment extension applies only for taxes reported on the 2019 federal tax return, and, therefore, any transition tax installments scheduled to be paid on April 15, 2020 will likely continue to be due on such date because those amounts constitute deferred payments of 2017 taxes.
The Treasury may issue specific transition tax payment guidance that better aligns with its intention to provide economic stimulus and relief to taxpayers. However, until any such notice is provided, taxpayers should plan to pay transition tax installments on their regularly scheduled due dates so as not to risk accelerating the full transition tax outstanding balance.
Clients are strongly advised to contact their E. Cohen advisor/preparer to learn more about all deadline changes, to include changes by state, and how they might impact your business and/or personal tax situation.
Stephen White is the Director of Operations and Growth at E. Cohen. He oversees all firm operations and leads marketing, client engagement, business development and strategic partnership activities. Stephen is an accomplished executive with wide-ranging creative, strategic and management skills and is responsible for developing and executing on the firm’s overall growth objectives.
Prior to joining the firm, Stephen served as Vice President of Practice Growth for a local defense cont