Tax Deadlines: Beyond April 15th
When is my tax return due? When do I need to make that tax payment? What would usually be pretty simple questions to answer has, like so many other aspects of our lives, become a bit more complicated. And to add to the complexity, the guidance and rules have been continuously evolving over the recent weeks. In an effort to provide an overview of the deadlines that are currently in effect for taxpayers, we have updated our blog with a summary of the most recent guidance provided by the IRS, the North Carolina Department of Revenue and the South Carolina Department of Revenue.
We will continue to monitor additional guidance as it is released and update the information on our blog as necessary. However, please don’t hesitate to reach out to your BRC advisor with any questions you may have.
Please note, if your tax situation requires you to file income tax returns in states other than those specifically addressed within our blog, 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.
Federal Deadlines:
IRS Notice 2020-23 is the most recent guidance issued by the IRS that provide taxpayers with relief related to various tax deadlines. This notice expands upon previous guidance issued in Notice(s) 2020-20 and 2020-18. IRS Notice 2020-23 provides many taxpayers with an extension of time to file their income tax returns, make required income tax payments, as well as provides revised due dates for certain other “time sensitive actions”. This notice states that all forms and tax payments specified in the notice that would have otherwise been due on or after April 1, 2020 and before July 15, 2020 (whether this is their original or extended due date) are automatically postponed to July 15, 2020 (without any interest or penalties being assessed). The notice also states that the automatic extension of time to file/pay includes all related schedules and required elections that would normally accompany the specified return.
The following provides a list of some of the forms and payments to which the relief granted in this notice applies:
- Individual income tax returns (Form 1040 series) and related payments,
- Corporate tax returns (Form 1120 series) and related payments,
- Partnership tax returns (Form 1065 series),
- Estate and trust returns (Form 1041 series) and related payments,
- Estate and generation skipping transfer tax return filings (Form 706 series) and related payments,
- Form(s) 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent,
- Gift or generation skipping transfer tax returns (Form 709) and related payments including those that are due on the date an estate is required to file Form 706,
- Estate tax payments of principal or interest due as a result of an election made under sections 6166, 6161, or 6163 as well as annual recertification requirements under section 6166 of the Code,
- Exempt organizations business income tax returns (Form 990 series), including payments and filings on Form 990-T, 990-PF and 4720, and
- Quarterly estimated income tax payments originally due within the April 1 – July 15, 2020 deadline for corporations, individuals and estates and trusts. This means that 2nd quarter 2020 estimated income tax payments that would have been due June 15th have been extended to July 15, 2020.
If a taxpayer needs additional time to file beyond July 15, 2020, they will need to file the appropriate extensions and pay any taxes due by July 15, 2020. This will provide taxpayers an extension of time to file up to their traditional extended due date.
In addition to the specified forms to which this relief applies, the notice also provides relief to many “time-sensitive actions”. The notice states that if these actions would otherwise have been required to be performed by the taxpayer on or after April 1, 2020 and before July 15, 2020, taxpayers will now have until July 15, 2020 to perform such actions. The notice defines “time-sensitive actions” to be those items listed in Revenue Procedure 2018-58 as well as specifically provides relief related to the 180-day reinvestment period under the Qualified Opportunity Zone rules. Some examples of the items listed as “time-sensitive actions” in Revenue Procedure 2018-58 include:
- the 45-day identification period and the 180-day replacement period required under the like-kind exchange rules of IRC 1031,
- the filing of Form 8752 by fiscal-year S-Corporations and partnership, including the related required deposits,
- the deadlines for adopting, election and/or changing certain accounting methods or periods, including the filing of Form 3115 for consent for nonautomatic accounting method changes.
In addition to the formal guidance released by the IRS, the IRS also has a webpage dedicate to frequently asked questions related to the federal filing and payment deadlines:
Click – IRS FAQ’s (Payment and Filing Deadlines)
Some of the more notable Q&A responses currently on their website include:
- 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.
North Carolina:
The most current relief provisions provided by the North Carolina Department of Revenue (NCDOR) were issued in a notice released March 31, 2020. This notice provides relief to certain taxpayer’s that fail to timely obtain a license, file a return, or pay a tax with a due date on or after March 15, 2020 through 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.
This relief applies to the filing of all individual, corporate (including franchise tax), partnership, trust and estate income tax returns otherwise due within this period.
If a taxpayer needs additional time to file beyond July 15, 2020, they will need to file the appropriate extensions and pay any taxes due by July 15, 2020. This will provide taxpayers an extension of time to file up to their traditional extended due date.
The current relief relates to the waiver of penalties that would normally be associated with the late filing and/or payment of certain returns/taxes. At this time, North Carolina state law does not allow for the deferral of interest on late payments; however; as mentioned below, it is possible that relief will be provided at a later date through a legislative change. However, absent retroactive legislative action, interest will accrue on tax payments, including estimated payments, received after their original due date (the current NC interest rate through June 30, 2020 is 5%).
As mentioned above, there has been no formal guidance released related to the waiver of interest charged on late payments, however; 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.
In addition to guidance provided by the NCDOR, on April 8, 2020, the North Carolina Secretary of State announced that while they do not have the statutory authority to extend the due date for filing Annual Reports or the associated fees, they will not consider reports (and related fees) originally due April 15, 2020 as delinquent until after June 15, 2020. They are still encouraging businesses to file online by the original April 15th due date, if at all possible.
South Carolina:
In an attempt to align its filing requirements and deadlines with the relief provided by the IRS, the South Carolina Department of Revenue (SCDOR) issued SC Informational Letter #20-8 on April 13, 2020. This letter expanded upon previous guidance issued by the SCDOR and moves the due date for certain income tax returns and payments originally due on or after April 1, 2020 and before July 15, 2020 to July 15, 2020. This relief is granted to “all taxpayers that have an income tax, franchise tax, or corporate license fee filing or payment deadline (originally or pursuant to a valid extension) between April 1, 2020 and July 15, 2020” and includes an extension of time to pay quarterly estimated tax payments otherwise due within the relief period. In addition, their letter states that all penalties and interest related to such extension of time will be waived.
If a taxpayer needs additional time to file beyond July 15, 2020, they will need to file the appropriate extensions and pay any taxes due by July 15, 2020. This will provide taxpayers an extension of time to file up to their traditional extended due date.
The relief provided in SC Information Letter #20-3 (discussed below) is still applicable for all other taxes administered by and returns filed with the SCDOR.
The SCDOR issued SC Information Letter #20-3 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 (not covered by subsequently issued SC Information Letter #20-8) originally due on or after April 1, 2020 and before June 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. This information letter also states that all penalties and interest related to such extension of time will be waived.
Jill W. Clark Director of Tax Quality Assurance, CPA
NC License #30742