COVID-19 Consequence: Tax Payment Deadlines Extended

Please note, this post was originally posted on March 18, 2020. Due to quickly developing changes, this information may not reflect up-to-date announcements.

Please visit the following link for updated information: COVID-19 Consequence: Tax Filing and Payment Deadlines Extended

UPDATE:  Tax Filing Deadline Now Extended as Well

This past Tuesday, the Government announced that the deadline for making tax payments due on April 15th  would be extended to July 15th.  At that time, however, the Government cautioned that the tax return filing deadline would remain April 15thToday the Government reversed that latter position and now says that the filing deadline will also be extended to July 15th.  Treasury Secretary Steven Mnuchin made the announcement via tweet (@stevemnuchin1).

Federal Tax Relief

In a press conference on March 17, 2020, the U.S.  Department of the Treasury announced an automatic 90-day extension of time to make federal income tax payments. Individuals may defer up to $1 million in tax payments, while corporations may defer up to $10 million in tax payments, without incurring interest or penalties.

Passthrough entities, such as companies taxed as partnerships and S corporations, do not normally pay tax at the entity level, but the automatic tax payment extension may be utilized by owners of such entities.

The deadline for filing tax returns normally due on April 15, 2020, remains unchanged.  However, taxpayers may request an automatic six-month extension of time to file their tax returns by filing Form 4868 or Form 7004 (as applicable).

So, individuals and corporations (with a calendar-year-end) must continue to file Forms 1040 or Forms 1120 by April 15 (or timely request an automatic extension) but will not have to pay associated federal income tax until July 15, 2020.

Missouri State Tax Relief

On March 18, 2020, the Missouri Department of Revenue announced that it would follow the Treasury Department’s lead and also allow a 90-day automatic extension of time to pay tax while keeping the April 15, 2020, filing deadline.

Stay Tuned

Many details remain unclear and additional guidance regarding employment-related tax payments and filings may be forthcoming. Capes Sokol will continue to monitor developments in this area and provide updates.

Laura E. Krebs Al-Shathir

Laura serves as tax and corporate counsel to businesses in a variety of industries. She provides business planning advice for corporate transactions, focusing on associated federal income tax issues, resolving complex tax controversy matters, foreign income and assets tax compliance issues.

The content on this post does not constitute legal advice, may be geographically or time sensitive, and is for informational purposes only. Any opinions expressed in this post are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. You should not act upon the information presented herein without seeking the advice of legal counsel. The choice of a lawyer is an important decision and should not be based solely upon advertisements. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits.

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