In an effort to keep everyone up to date on the latest information that is available related to the upcoming April 15th tax filing deadline, we will be continually monitoring and updating this webpage. Please check back regularly for updates.
The IRS has released Notice 2020-20 that specifically addresses the deadline for gift tax returns, Form 709. Gift tax returns were not included in the original guidance provided by the IRS, however; this notice grants gift tax returns the same treatment as income tax returns and extends the filing and payment deadline to July 15, 2020. This relief is automatic and does not require the filing of Form 8892 by April 15, 2020. A taxpayer may file Form 8892 by July 15, 2020 to request an extension of time to file until October 15, 2020.
On March 24, 2020, the IRS released a series of Q&A related to the extension of the April 15th deadline that clarifies some of the questions that have been coming up. The following is a summary of the additional guidance that has been provided:
- In order for a taxpayer to qualify for relief provided under IRS Notice 2020-18, the return or payment must be due on April 15, 2020 – this relief does not apply to Federal income tax returns and payments due on any other date.
The following are the forms the IRS specifically states are granted an extension under the notice:
- Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
- Form 1041, 1041-N, 1041-QFT
- Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
- Form 709 (Q&A not yet updated but addressed in IRS Notice 2020-20)
- Form 8960
- Form 8991
- With respect to Form 990-T, if that Form is due to be filed on April 15, then it has been postponed to July 15 under the Notice.
The Q&A specifically addresses the question regarding estate tax returns (Form 706) and states that the relief does not apply to the filing of these returns.
Assuming this list is all-inclusive (and unless other guidance is released), the following forms will still need to be filed by the April 15th deadline:
- Estate Tax Returns (Forms 706) – specifically addressed in the Q&A
- Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts
- Form(s) 990/990-PF (if their due date was originally April 15th) – Q&A specifically grants relief to 990-T filings/payments due April 15th
- Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent
- If you properly estimate your 2019 tax liability using the information available to you and file an extension form by July 15, 2020, your tax return will be due on October 15, 2020. Therefore, there is no need to file Form(s) 4868/7004 by April 15th in order to obtain an extension to October 15th. These will need to be filed by July 15, 2020.
- Second quarter 2020 estimated income tax payments are still due on June 15, 2020. First quarter 2020 estimated income tax payments are postponed from April 15 to July 15, 2020.
- For any taxpayer whose Federal income tax return filing due date has been postponed from April 15 to July 15, 2020, the due date of that taxpayer’s section 965 installment payment has also been postponed to July 15, 2020.
- Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.
- Because the due date for filing Federal income tax returns is now July 15, 2020, under this relief, you may make contributions to your HSA or Archer MSA for 2019 at any time up to July 15, 2020.
- For any taxpayer whose Federal income tax return filing due date has been postponed from April 15 to July 15, 2020, the grace period under section 404(a)(6) for employers to make contributions to their workplace-based retirement plans that are treated as made on account of 2019 ends on July 15, 2020.
After Treasury Secretary Mnuchin announced on Friday, March 20th that the IRS is moving the April 15th tax filing deadline to July 15th, the IRS released Notice 2020-18. This notice supersedes previous guidance issued in Notice 2020-17 (related to the deferral of income tax payment due April 15th). The following is a summary of the key take-aways of the recently issued notice:
- The filing and payment deadline has been automatically moved from April 15th to July 15, 2020 (no Form 4868 or 7004 is required to be filed to obtain an extension)
- The notice specifically states the relief applies to individuals, trusts, estates, partnerships, associations and corporations.
- There is no limit on the amount of the payment that may be postponed (removed the $1 million/$10 million caps in previous guidance)
- Extension of time only applies to income taxes (including self-employment taxes).
- Relief is provided for federal income tax returns due April 15, 2020 (related to the 2019 tax year) and 1st quarter estimated income tax payments otherwise due April 15, 2020 (related to the 2020 tax year). Note: Based on the wording this appears to only provide relief to 2019 tax year returns so any 2018 returns on extension that were due 4/15/20 will still need to be filed by April 15th.
- The extension provides relief from interest and penalties that would otherwise apply during the period from April 15, 2020 – July 15, 2020.
It has also been reported that the IRS is increasing pressure on states to align their tax filing deadlines with the federal deadline so hopefully we will see more movement from the states to line up their deadlines with the new July 15th federal deadline.
On March 31, 2020, a joint statement was released by General Assembly lawmakers and Governor Cooper that indicates that it is their intention to retroactively provide taxpayers relief from the accrual of interest on income tax payments that are made beyond the original April 15th deadline but before the July 15, 2020 extended deadline. While they have indicated this is their intent, currently state law prohibits this relief from being granted. Therefore, both the General Assembly and Governor will have to approve a legislative change to ensure taxpayers are not liable for any such interest. We will have to wait for this legislative change to know if this relief will apply to taxes other than the indicated income tax payments. We will provide updated information related to this as it becomes available.
On March 23, 2020, The North Carolina Department of Revenue formally announced that they will be providing an automatic extension of time for the filing of all individual, corporate (including franchise tax), partnership, trust and estate income tax returns to July 15, 2020. The intent being to mirror the federal guidance that has been issued. At this time, state law does not allow for the deferral of interest on late payments; however; as indicated above, it is likely relief will be provided at a later date through a legislative change. However, without any retroactive legislative action, interest will accrue on tax payments, including estimated payments, received after April 15th (the current NC interest rate through June 30, 2020 is 5%).
The North Carolina Department of Revenue issued a notice on March 31, 2020 providing relief to certain taxpayer’s that fail to timely obtain a license, file a return, or pay a tax with a due date between March 15, 2020 and July 15, 2020. The penalty relief will be granted to those taxpayers so long as the license is obtained, the return (or extension) is file, or the tax is paid by July 15, 2020.
The notice provides the following list of tax types to which this relief is granted: Income and Franchise Tax, Withholding Tax, Sales and Use Tax, Scrap Tire Disposal Tax, White Goods Disposal Tax, Motor Vehicle Lease and Subscription Tax, Solid Waste Disposal Tax, 911 Service Charge for Prepaid Telecommunications Service, Dry-Cleaning Solvent Tax, Primary Forest Products Tax, Freight Car Line Companies as well as various excise taxes.
Please note, the notice does not provide relief for any applicable interest related to late payments, however; as indicated above it is possible relief will be provided at a later date.
On March 23, 2020, the South Carolina Department of Revenue announced they were moving the due date for income tax returns and payments originally due April 15, 2020 to July 15, 2020. This is in an attempt to align its deadlines with the relief provided by the IRS.
The relief provided on March 17th (discussed below) is still applicable for all other taxes administered by and returns filed with the SCDOR.
The South Carolina Department of Revenue (SCDOR) issued a notice on March 17, 2020 providing relief to certain taxpayers impacted by COVID-19. Taxpayers to which this relief applies are:
- Individuals and businesses located in South Carolina,
- Taxpayers who have businesses in South Carolina with offices in South Carolina,
- Taxpayers whose tax records are located in South Carolina, or
- Taxpayers whose returns are prepared by tax professionals impacted by COVID-19.
For those taxpayers that meet one of the above criteria, the due dates for returns and payments originally due on or after April 1, 2020 have been postponed until June 1, 2020. This includes all taxes administered by the SCDOR such as sales and use tax returns, admissions tax returns, motor fuel user fee returns, etc. In addition, their letter states that all penalties and interest related to such extension of time will be waived.
Please note, if your tax situation requires you to file income tax returns in states other than those specifically addressed above, your BRC tax advisor will be closely monitoring any guidance released by those states and notify you of any impacts that guidance has on your tax filing situation.
We will continue to monitor the ever-evolving guidance that may impact our clients and update this page as additional information is available. As always, please don’t hesitate to reach out to your BRC advisor with any questions you may have.