Friday afternoon, March 20, 2020, the IRS officially announced that certain tax returns due April 15 will not have to be filed until July 15 this year (Notice 2020-18). The postponement applies to any individual, a trust, estate, partnership, association, company or corporation with a federal income tax return or income tax payment due on April 15. The postponement is automatic, meaning that no applications for extension of time to file returns need to be filed.
The IRS had previously announced a postponement of federal tax payments due April 15 (Notice 2020-17). The prior Notice provides that corporations could postpone up to $10 million in tax payments. All other taxpayers could postpone up to $1 million in tax payments. Notice 2020-18 also removes the limitation on the amount of tax that can be postponed.
Under Friday’s notice, no interest, penalty, or addition to tax for failure to file a federal income tax return or to pay federal income taxes will accrue between April 15, 2020 and July 15, 2020, for any return or payment postponed by the notice.
Friday’s notice applies only to federal income tax returns and payments due April 15, 2020, for 2019 tax years, and to estimated income tax payments due April 15, 2020, for 2020 tax years.
On March 17, 2020, Maryland Comptroller Peter Franchot announced that Maryland business and individual taxpayers will be afforded the same relief. No interest or penalty for late payments will be imposed if 2019 tax payments are made by July 15, 2020.
Also, taxpayers that take advantage of the federal extension to file their return will continue to be granted an automatic extension of their Maryland return.
Other states have announced similar relief, while some have yet to issue guidance.
WMS will continue to monitor developments in this area and alert you to any changes that may affect you. Please contact your advisor with any questions