On March 18, 2020, the IRS issued Notice 2020-17 deferring federal income tax payments due on April 15, 2020 to July 15, 2020. This notice was superseded on March 20, 2020 by Notice 2020-18 which expanded the relief measures. The expanded relief measures include an extension to the filing due date of U.S. federal tax returns as well as removing restrictions on the amount of income tax that could be postponed. The information below contains the updated relief measures announced in Notice 2020-18.
Postponement from paying U.S. federal taxes
Any person1 affected by COVID-19 can access the postponement of federal tax relief measures.
This deferral applies to the following federal income tax payments (including payments of tax on self-employment income) due on April 15, 20202:
- Federal income tax payments due for the 2019 tax year; and
- Federal estimated income tax for the 2020 tax year (the first of four estimated tax payments for the 2020 tax year).
This deferral was initially subject to restrictions on the amount of tax payable, but these restrictions have been eliminated.
With regards to the deferral of the federal income tax payment date, the period between April 15, 2020 and July 15, 2020 will be disregarded in the calculation of any interest, penalty or addition to tax.
Extension to U.S. federal personal tax return filing deadlines
The original Notice 2020-17 did not extend the filing due date of any U.S. tax returns or information returns. Notice 2020-18 supersedes this notice affording taxpayers3 affected by COVID-19 with an automatic filing extension from April 15, 2020 to July 15, 2020. Affected taxpayers do not have to file any forms to request this automatic extension.
U.S. Citizens or U.S. Permanent Residents residing in Canada
If you are a U.S. citizen or a U.S. Permanent Resident (Green Card holder) residing in Canada4, you are already afforded an automatic two-month extension to file your return. The normal due date for filing your U.S. tax return would be June 15, 2020.
This normal due date is also extended to July 15, 2020 based on Notice 2020-18.
If you are still unable to file your return by July 15, 2020, you can request a further extension to October 15, 2020 by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
State tax filings
The notice did not provide any information related to measures being undertaken by individual U.S. states. The American Institute of Certified Public Accountants (AICPA) has been monitoring updates provided by each state and has provided a document on their website outlining current measures for each state: AICPA COVID-19 U.S. State information.
- The Secretary of the Treasury has determined that any person with a Federal income tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in Notice 2020-18. The term “person” includes an individual, a trust, estate, partnership, association, company or corporation as provided in section 7701(a)(1) of the Code.
- The Notice does not extend due date for the payment or deposit of any other type of Federal tax (e.g., estate, gift, and payroll taxes).
- The Secretary of the Treasury has determined that any person with a Federal income tax return due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in Notice 2020-18. The term “person” includes an individual, a trust, estate, partnership, association, company or corporation as provided in section 7701(a)(1) of the Code.
- The automatic two-month extension is not limited to U.S. citizens or U.S. Permanent Residents (U.S. Green Card holders) residing in Canada, but for purposes of this article we are only referring to those U.S. Persons residing in Canada.