On Wednesday, March 18, in Notice 2020-17, the U.S. Treasury Department announced that, subject to certain caps described below, the due date for federal income tax payments (including the first quarterly estimated tax payments for 2020) otherwise due on April 15, 2020 has been extended until July 15, 2020. Only the due date for payment of taxes has been extended; absent an extension, tax returns otherwise due on April 15 must be filed by such date in order to avoid late-filing penalties. Moreover, the extension applies only to income tax payments (including payments of tax on self-employment income); no extension is provided for the payment or deposit of any other type of tax.
For stand-alone corporations and consolidated groups, up to $10 million in tax payments (including 2020 estimated taxes) otherwise due on April 15 can be delayed. For non-corporate taxpayers, up to $1 million in tax payments otherwise due on April 15 (including estimated tax payments) can be delayed. In the case of individuals, the $1 million cap applies to all taxpayers without regard to filing status.
The caps described above are applied in the aggregate to all payments otherwise due on April 15, including (i) any unpaid tax liability for the 2019 taxable year and (ii) the first quarterly estimated tax payment for 2020. Amounts otherwise payable on April 15 in excess of the applicable cap must be paid by April 15 in order to avoid the imposition of penalties and interest on those amounts.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers. In addition, this information was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any U.S. federal, state or local tax penalties that may be imposed on such person.
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