The IRS released Notice 2020-19 that clarifies some issues on the 90-day delay in tax payments:

• It applies to both the balance due on the 2019 tax return and the first quarter 2020 estimated tax payment.
• Nothing needs to be done to take advantage of this benefit. The IRS will consider this in calculating any interest or penalty.
• It applies to trusts and estates as well as to individuals and corporations.
• Extensions must still be filed if the actual tax return is not filed by the original due date (this may be changing)
• Note: The second quarter 2020 estimated tax payment is still due as scheduled:  June 15, 2020.

The amount to be interest and penalty free is up to $10 million for corporations and up to $1 million for all others (i.e., individuals, trusts and estates).

Other Countries:

The US is not the only country providing relief from tax filing requirements as a result of COVID-19.  Below are a few other examples of what is happening in other countries.

CANADA:

It should be noted that the following are measures announced by the federal government, similar to the US where Secretary Mnuchin announced delays to be issued by the IRS; these measures still need to be formalized by the Canadian parliament.  Therefore, final action is still necessary.

Tax filings and payments

Individuals

The filing due date for 2019 personal tax returns is to be deferred until June 1, 2020 (April 30 is the normal due date).

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 is to be deferred until after August 31, 2020. Similar to the US, no interest or penalties will accumulate on these amounts during this period.

Trusts

The filing due date for 2019 calendar year trust tax returns is deferred until May 1, 2020 (March 31 is the normal due date).

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 is to be deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period.

Corporations

For corporations, the filing due date for corporate income tax returns has not been deferred (June 30 is the normal due date).

The deadline to pay any income tax amounts, including tax balances due, as well as instalments, that become owing on or after March 18, 2020 is to be deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period.

LUXEMBOURG:

Requests for Delays and Cancellations of Certain Taxes Due

Luxembourg businesses experiencing liquidity problems (not yet defined) because of the COVID-19 pandemic can request the following:

(1) cancellation of their quarterly advance tax payments for corporate income tax and municipal business tax; and

(2) a delay on payments for corporate income tax, municipal business tax, and net worth tax.

This applies only to advances due after February 29, 2020. You will note that the cancellation of the advance tax payments does not apply to net worth taxes. 

Delay of 2020 Luxembourg Tax Returns and Elections 

The deadline for filing tax returns for both companies and individuals has been extended until June 30, 2020. The normal due dates are March 31 for individuals and May 31 for corporations.  The deadline extension also applies to any decision on modifying or revoking the choice to be taxed individually.  

AICPA Link to US States Response to COVID-19:

The AICPA has established a link that provides information regarding state extension and delayed payment provisions as the result of the COVID-19 pandemic.  This will be periodically updated. Click on the link to access this information.

State tax filing relief chart for coronavirus 

If you have any questions about your own filing requirements and how these announcements might impact your due dates and payments, please contact any team member from Moore Doeren Mayhew.