We released a Tax Alert earlier this week clarifying the U.S. Treasury’s extension of the federal filing and payment deadlines. The IRS has released additional, non-binding guidance related to IRS Notice 2020-18 (the “Notice”), which grants certain filing and payment relief in response to the COVID-19 pandemic. The Notice also explains that taxpayers receive an extension of time to make certain tax-advantaged retirement and health savings contributions and an extension of time to make Section 965(h) installment payments.
The guidance comes in the form of a Q&A that provides clarity on the IRS’s interpretation of the Notice. Note that the IRS and U.S. Treasury Department are continuing to consider additional administrative guidance on these issues. The Q&As are periodically updated to reflect new information and updated IRS insights.
Below is a summary of the significant items in the Q&A:
- Certain filings and payments due on April 15, 2020 are now due on July 15, 2020
- Extension applies only to returns or payments due on April 15 – not before, not after
- Includes fiscal-year taxpayers with returns or payments due on April 15
- Does not apply directly to states
- Second-quarter estimated payments are still due on June 15 (please note this is before first-quarter payments are due)
- Extends time for IRA contributions
- Extends time to pay 10-percent additional tax on distributions included in gross income
- Excess deferrals must still be withdrawn by April 15
- The grace-period under IRC section 404(a)(6) for deductible employer workplace-based retirement contributions is now July 15
Health and Medical Savings Accounts
- HSA and MSA contributions may be made until July 15 and be included in the 2019 tax year
- Extension applies to installment payments made under section 965(h)
- Extension applies to BEAT payments made via Form 8991
- Amended 2016 returns do not have any extension of the statute of limitation
- No relief for underpayment of 2019 estimated taxes
Note that the information above applies to federal tax and does not apply directly to states. Although many states, including California, are implementing their own forms of taxpayer relief.
If you have any questions regarding Notice 2020-18 or its impact on your business, please contact GHJ’ tax advisors.