RKL Updates Local Taxpayers on Deadline Deferral for Federal Tax Payments

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On Wednesday, the IRS formally released Notice 2020-17, which delays the deadline for paying taxes otherwise owed on April 15, 2020. The payment deferral applies to 2019 taxes as well as 2020 first quarter estimated income and self-employment taxes for individual taxpayers owing less than $1 million in cash, and for corporations owing less than $10 million in cash at April 15.

The new payment deadline will be July 15, 2020 and no interest or penalties will apply for payments made by July 15.

Let’s take a look at what it means in practical terms and think through some common scenarios and questions that may affect local taxpayers.

Does this mean tax returns are no longer due on April 15?

No! The IRS is granting taxpayers 90 extra days to pay their taxes. However, if the taxpayer wishes to file their tax return after 4/15, they will need to file an extension request with the IRS. The filing extension grants an extra six months, moving the 2019 tax return filing deadline to October 15.

Why might I still wish to file for an extension at April 15?

In light of the issues surrounding COVID-19, many taxpayers and tax preparers may appreciate the additional time to prepare the 2019 tax return. In addition, since no money must be paid with the extension request, filing a request for federal extension can be done electronically by the preparer and requires minimal effort.

Must I file an extension to take advantage of delaying my 2019 tax payment and/or 2020 first quarter estimate normally due on April 15?

No, an extension request is not necessary in order to be able to delay payments until July 15. Taxpayers who file on or before April 15 can still delay paying their federal taxes until July 15 and no interest or penalty will apply.

Click here for answers to the rest of your questions about the federal tax payment deadline deferral.

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