IRS issues welcome extension of filing deadline
As highlighted in our recent alert, the US Secretary of the Treasury, Steve Mnuchin, had announced on March 17, that US taxpayers would get a 90-day reprieve in settling their 2019 tax bills, extending the tax payment due date to July 15. At the time, this extended payment deadline had been limited to taxpayers owing $1 million or less in taxes. In addition, this payment extension had not changed the original tax return filing deadline of April 15.
To provide additional relief, the IRS issued Notice 2020-18 on March 20. Among other clarifications, the notice extended the April 15, 2020 tax filing due date to July 15, 2020 and eliminated the $1 million extension payment limitation noted above. These changes eliminated potential complexity, resulting in welcome relief for both taxpayers and tax preparers.
Extended filing and payment deadlines enacted by most states
In addition to US federal requirements, state tax authorities also continue to monitor the pandemic and take steps to provide taxpayer relief. Although states will often work to align filing deadlines with those provided for US federal purposes, the rules and requirements can vary, making it challenging for employees with multi-state requirements to keep track of the rules. To assist in staying abreast of new developments, the American Institute of Certified Public Accountants (AICPA) has compiled the latest developments on state tax filings related to the coronavirus. See AICPA Coronavirus State Filing Relief Summary.
As of March 26, twenty-seven states (including the District of Columbia) have changed their tax filing deadlines to match the IRS July 15 extended deadline, with six states providing relief through extensions to other dates. The specific measures used by states to provide filing relief for taxpayers continues to evolve rapidly. For example, in California, the Franchise Tax Board had announced (on March 13) an extension of the tax filing deadline from April 15 to June 15, only to further extend filing and payment deadlines to July 15 on March 18. Although the AICPA compilation is updated on a daily basis, it is important to confirm any guidance directly on the appropriate state revenue website (State Tax Agencies).
Along with many of you, GTN is now operating on a work-from-home basis. We have long been committed to flexible work arrangements, which are fully supported by our technology platform. As a result, we can continue to work at full capacity, allowing us to monitor and keep you informed on new developments in this fluid tax environment.