COVID-19 Tax Relief: Questions and Answers

What tax relief has been granted?

The due date for making federal income tax payments due April 15, 2020 has been postponed until July 15, 2020.  See IRS Notice 2020-17, which is available here.

What taxes apply?

The relief is available only with respect to the following:

(i) federal income tax payments, including payments of tax on self-employment income, due on April 15, 2020 with respect to the 2019 taxable year.

(ii) federal estimated income tax payments, including payments of tax on self-employment income, due on April 15, 2020 with the respect to the 2020 taxable year.

Are penalties and interest waived?

There will be no penalties and interest imposed on payments made by July 15, 2020.    Interest and penalties will begin to accrue on July 16, 2020.

Is there a limit on the amount of taxes that may be postponed?

For most taxpayers, the aggregate income tax payment amount that may be postponed is $1,000,000.  For C Corporations, or those corporations that file a consolidated return, the aggregate income tax payment amount that may be postponed is $10,000,000.

Does the extension apply to timely filing a return?

No, taxpayers must still timely file their federal tax returns, generally by April 15, 2020, subject to any extension.

Does the extension impact refunds?

Refunds are not deferred and taxpayers entitled to a refund are encouraged to timely file to claim any refund they may be owed.

Does the extension to pay apply to other federal taxes?

At this time, no.  The extension does not apply to any payment or deposit for any other type of federal tax (e.g., payroll taxes, gift taxes, estate taxes, excise taxes), or the filing of any tax return or information return.

Are state and local taxing authorities granting the same relief?

A state or local taxing authority may or may not conform to the federal income tax payment extension.  Some states have issued orders with respect to tax relief to date and others may as well; however, given the lack of conformity among state and local taxing authorities, taxpayers should monitor updates from their state and local taxing authorities.  Also, a number of states have closed their tax offices to the public and have provided guidance on their websites as to alternative means of communicating with the taxing authority.  The Ohio Department of Taxation has closed its walk-in center and is encouraging taxpayers to reach out by email or phone.

Where can I find additional information?

The IRS’ website is providing updates on tax relief related to COVID-19, which can be found here.