The Treasury Department issued Notice 2020-17 on March 18, stating taxpayers can delay paying some federal income taxes for 90 days but must still file their return or request an extension by April 15.
- The maximum deferral amount is $10 million for corporations, including consolidated groups as well as C corporations that are not part of a consolidated return
- The maximum deferral amount is $1 million for individuals (regardless of filing status) and other noncorporate filers
- The maximum deferral amount applies to payments due on April 15 relating to:
- Amounts due for 2019 (for either income or self-employment (SE) tax)
- Amounts related to first quarter 2020 (for either income or SE tax)
- The maximum deferral amounts (for both corporations and individuals) are in aggregate, including 2019 balances due plus 2020 first-quarter estimates
- Taxpayers taking advantage of this relief will not be subject to interest or penalties on liabilities eligible for deferral; accrual of interest and penalties on unpaid amounts begins on July 16, 2020
- The Notice provides no guidance or relief regarding second-quarter 2020 estimated tax payments due on June 15
This payment extension applies strictly to federal income and SE taxes. This reprieve does not apply to the payment or deposit of any other type of federal tax, nor does it apply to the filing of any tax return or information return.
Further, this relief does not automatically apply to state and local payment requirements. Please visit our state tax-filing extension matrix to see if your state has extended its deadlines in response to COVID-19.
As always, we encourage you to reach out to your Baker Tilly advisor to see how these developments impact your tax position.