Individual taxpayers are able to defer paying up to $1 million of federal income and self-employment taxes for 90 days without penalties or interest. The $1 million cap is per tax return regardless of the filing status (single filer or a married couple) of the return. Corporations can defer paying up to $10 million of federal income taxes for 90 days without penalties or interest. This 90-day payment deferral period would defer those payment due dates from April 15, 2020, to July 15, 2020. If the taxpayer exceeds these limits ($1 million for individuals or $10 million for corporations), then the excess will accrue interest beginning April 15, 2020. If the taxpayer doesn’t make their postponed payment by July 15, 2020, then interest will begin accruing July 16, 2020. The IRS notice specifically says it does not include any other taxes other than those specifically enumerated in the notice.
There has been no change to the tax return filing deadlines. Individuals and corporations would still need to file their tax returns (or request formal extensions to file) by their normal due dates, but would not have to pay anything with those returns/extensions until July 15, 2020.
This deferment also includes the 1Q 2020 estimated tax payment that is due April 15, 2020. There is no mention of the 2Q estimate in the IRS notice, so presumably, 2Q estimates are still due on June 15, 2020 (normal due date).
Additionally, we are monitoring state reactions to the IRS payment deferral. Some states have already announced delays due to COVID-19, but other states have been waiting on this IRS announcement. It’s likely that many states may piggyback off the federal guidance in this matter, but we will continue to monitor.