April 15, 2020
Timothy J. Eifler
Member, Stoll Keenon Ogden PLLC
James B. Martin Jr.
Member, Stoll Keenon Ogden PLLC
Thomas E. Rutledge
Member, Stoll Keenon Ogden PLLC
Stephen A. Sherman
Of Counsel, Stoll Keenon Ogden PLLC
On March 24, our firm published reports addressing changes in federal, state and local tax return and payment dates. However, continuing developments in response to the coronavirus pandemic have resulted in further changes made in those deadlines, and more tax authorities have published guidance. For these reasons, following is a report of the most current information. SKO will continue to track developments and will update you as appropriate.
Federal Returns, Final 2019 Payments, and Estimated 2020 Quarterly Payments
The IRS has now issued a trio of releases, 2020-17, 2020-18 and 2020-23, that cumulatively provide relief from federal income tax filing and payment deadlines to U.S. taxpayers who have been adversely affected by the COVID-19 emergency and have a federal income tax payment or federal income tax return otherwise due on April 15, 2020. These Notices postpone to July 15, 2020 the obligation to file income tax returns and pay income taxes (including estimated income taxes) otherwise due April 15, 2020. No interest, penalty, or addition to tax for failure to file a federal income tax return or to pay federal income taxes will accrue between April 15, 2020 and July 15, 2020, for any return postponed by the Notices. In addition, the estimated tax payment deadlines of April 15 and June 15 have been delayed until July 15. While these Notices address both business and personal returns, this discussion is focused upon personal returns.
2019 Federal Income Tax Returns
Notice 2020-18 postponed the due date for 2019 individual income tax returns to July 15, 2020 (rather than April 15 as is the case in “normal” years). There is no need to file a request for an extension in order to enjoy the benefit of the postponement – it is automatic.
That said, you may file your 2019 individual income tax return at any time and you should consider filing it early if you are expecting a refund.
Final 2019 Federal Income Tax Payments
Individuals with unpaid income tax normally pay the amount of tax due as shown on their return when filed on April 15. Individuals requesting the automatic 6-month extension of time to file their individual income tax return (Form 4868) will still make an estimated payment with the application for the extension. Taxpayers under or overestimating the tax liability would make a final payment with or request a refund on their income tax return when filed by the extended due date.
The due date to make either a final or an estimated income payment for 2019 individual income taxes is postponed from April 15 to July 15, 2020. If you request an automatic extension to file your 2019 tax return to after July 15 (IRS Form 4868), you must make an estimated payment of your remaining 2019 income tax with that filing, just as you would were your return due on April 15.
The April 15 deadline for making contributions to IRAs and health savings accounts for 2019 has as well been moved July 15.
Estimated Payments on 2020 Federal Income Taxes
Persons who are self-employed, rather than having taxes withheld from paychecks and remitted to the IRS by the employer, make quarterly estimated payments of the income tax due with a reconciliation on the final income tax return for the year. Those estimated tax due dates are April 15, June 15, September 15 and January 15 of the subsequent year.
The due date for the estimated 2020 tax payments otherwise due on April 15 and June 15 has now both been moved to July 15.
• The due date for your 2019 federal tax return (assuming you is not applying for an extension) is JULY 15, 2020.
• The due date for your final payment (or your estimated payment if you are requesting an extension) on your 2019 taxes is JULY 15, 2020.
• The due date for you 1st quarter 2020 estimated taxes is JULY 15, 2020.
• The due date for your 2nd quarter 2020 estimated taxes is JULY 15, 2020. This is a change from the treatment under Notice 2020-18, which had left the due date for the 2020 2nd quarter estimated payment date in place. No longer is your 2nd quarter 2020 estimated payment due a month before your 1st quarter estimated payment is due.
S-Corporations, C-Corporations and Partnerships
The postponement of tax return filing date and tax payment dates applies to “persons” with a federal income tax payment or a federal income tax return due April 15, 2020. The term “person” includes not only individuals but also partnerships, corporations and other taxpayers such as trusts and estates.
The relief afforded to date likely will have little impact on S-Corporations as most are calendar year taxpayers and the 2019 tax return for such taxpayers was due on March 16, or if extended, then September 15. Partnerships (most LLCs with two or more members are taxed as partnerships) do not file a tax return, but rather an “information return” (Form 1065). The Form 1065 for partnerships using a fiscal year is due the 15th day of the third month after the year end. Notice 2020-18 is express that it does not extend the due date for information returns.
Assuming the partnership uses a December-31-year end and did not extend that due date for the 2019 tax year, the due date for its 2019 information return was March 15, 2020.
Partnerships that did not meet that deadline should have filed a request for an automatic extension (IRS Form 7004). If making that filing got lost in the flurry of activity as the “stay at home” and similar directives were being put in place, contact your CPA about what opportunity you have to make a late filing.
C-Corporations, which are taxable entities, and which pay estimated taxes, have had the due dates for both their tax returns and estimated payments pushed back by these Notices. While many C-Corporations are on fiscal (rather than calendar) years, if an estimated payment date was April, May or June 15, that payment date is pushed back to July 15.
Gift Tax Returns and Payments
In Notice 2020-20 (March 27, 2020), the IRS extended the deadline for filing Form 709 (U.S. Gift and Generation-Skipping Transfer Tax Return) that would have been due on April 15 to July 15. In addition, the due date for tax payments, whether they be federal gift or generation-skipping, that were otherwise due on April 15 have been delayed until July 15.
State Tax Filing and Payment Deadlines
These IRS Notices apply only to federal income tax return and payment due dates; they do not alter your state tax return and payment liabilities. Many states have or are planning to follow suit. The Indiana Department issued a Press Release announcing it will conform to the federal tax filing and payment postponement.
The Kentucky Department of Revenue announced it will adopt “most” of the income tax relief described in the Notices, and that was confirmed in Senate Bill 150.
Louisville Metro Revenue Commission
Consistent with the federal and state delays in return and payment due dates, the Louisville Metro Revenue Commission (“LMRC”) is extending the due dates for 2019 LMRC Occupational License Tax Return (Form OL-3) or Extension Request (Form OL-3E) to July 15, 2020. Absent this extension the due date would have been April 15, 2020. This deferral of the due date applies to all companies having a fiscal year end of December 31, 2019 through February 29, 2020.
In addition, the LMRC quarterly deposit deadline of April 15, 2020 has been shifted one month to May 15, 2020; check LMRC website for additional information.
Property Valuation Administrator (PVA) – Jefferson County, Ky
The deadline for filing the tangible property tax return with the Jefferson County PVA has been extended to July 15, 2020.
Property Valuation Administrator (PVA) – Fayette County, Ky
The deadline for filing the tangible property tax return with the Fayette County PVA has been extended to July 15, 2020.
Indiana Property Taxes
While the due date remains May 11, under Executive Order 20-05 (March 19, 2020), counties are directed to waive penalties on payments made within the sixty days after that date. However, this waiver does not apply to property tax payments that have been escrowed with a financial institution on behalf of the taxpayer.
Other Delays in Tax Deadlines
Notice 2020-23 contains a number of other delays in federal tax deadlines. We will be discussing them in another posting.
The American Institute of Certified Public Accountants is tracking state tax developments relating to the COVID-19 outbreak on its website.
Stoll Keenon Ogden understands that these are trying times for our clients and our country. Our firm operations have continued uninterrupted and our attorneys are equipped to serve as we always have – for over 120 years.
Our firm’s Tax practice advises businesses and individuals on all aspects of local, state and federal taxation, including tax planning, audits, administrative hearings and trials.
Please also be sure to consult the Stoll Keenon Ogden Coronavirus Resource webpage for additional articles and information related to the latest information on new laws and directives enacted by federal, state, and local governments in response to the Coronavirus pandemic.