Which Tax Deadlines Have Moved due to the Coronavirus?
Thanks to COVID-19, social distancing is the new norm and many businesses have closed physical locations (some voluntarily and some by a Governor’s Order). The federal government has recognized the negative impact this will have on taxpayers’ obligations to file tax returns and pay taxes.
While this is an ever-changing situation, see which tax deadlines have moved due to the Coronavirus (COVID-19):
Federal Income Taxes
On March 19, the IRS published Notice 2020-17. This Notice addressed only the deadline to pay federal income taxes. On March 20, the IRS published Notice 2020-18 to update and supersede Notice 2020-17. IRS Notice 2020-18 also addresses the deadline to file federal income tax returns.
Pursuant to Notice 2020-18, all federal income tax returns and payments that were originally due on April 15 are now due on July 15. The IRS will not impose any interest and penalties for 2019 federal income taxes that are paid by July 15.
The extension of this deadline applies to individuals (IRS Form 1040), C corporations (IRS Form 1120), and Estates and Trusts (IRS Form 1041). This extension also applies to the 2020 estimated tax payment that would have otherwise been owed on April 15. Until further notice, the second payment of 2020 estimated tax payments will still be owed on June 15.
If the 2019 federal income tax return is filed by July 15, there is no need for the taxpayer to file anything to request an extension. If a taxpayer is unable to file the return by July 15, then the taxpayer must file a request for an extension unless the IRS provides additional relief.
This relief applies only to federal income taxes. As of the date of this posting, the IRS has not provided relief for any other type of federal tax (employment tax, unemployment tax, estate tax, etc.).
UPDATE: On March 27, the IRS added gift and generation-skipping transfer (GST) tax returns to the list of taxes and tax returns that have been postponed to July 15.
State Income Taxes
On March 21, as part of the state’s response to the Coronavirus (COVID-19), the Pennsylvania Department of Revenue confirmed that personal income tax returns and payments for individuals are automatically extended until July 15. Interest and penalties will not be assessed if the return is filed and taxes paid by July 15. Additionally, the deadline for both the first and second estimated payments for 2020 are now due by July 15. Before this announcement, the first estimated payment would have been owed on April 15 and the second would have been owed on June 15.
Pennsylvania Form RCT-101 must be filed by any business entity that elects to file as a corporation with the IRS. Although the Department of Revenue did not specifically address RCT-101 on March 21, the instructions to the form state that the filing deadline is 30 days after the federal return is due. Therefore, logically, any corporations that would have been required to file a federal income tax return by April 15 should be able to file its RCT-101 by August 14. However, unless the Department of Revenue further clarifies this issue, taxpayers are encouraged to consult with their tax advisors to confirm when the return should be filed.
Pennsylvania Form PA-41 for Estates and Trusts are generally due on April 15. The Department of Revenue did not address these returns in their announcement on March 21. Therefore, until further notice, Estates and Trusts are expected to file returns by April 15. If the Estate or Trust is unable to file by this deadline, an extension should be requested.
Local Income Taxes
On March 23, both Berkheimer Tax Administrator and Keystone Collections Group announced that the deadline to file and pay 2019 Earned Income Tax will be automatically extended to July 15. However, their websites contain conflicting messages, so please discuss your obligations with your personal tax advisor.
The website for Berkheimer states that it is following the Federal and State requirements. However, as stated above, there is a conflict with current Federal and State requirements. In addition to 2019 taxes, the IRS extension also applies to the 1st quarterly estimated payment for 2020. The Pennsylvania extension goes further and provides the extension for 2nd quarterly estimated payment for 2020. According to Berkheimer, the extension applies to the 1st quarterly estimated payment for 2020, but the announcement is silent regarding the 2nd quarterly estimated payment.
The website for Keystone Collections states that it is extending the individual filing deadline to July 15 to match both Federal and State filing deadlines. However, the website is silent about any quarterly estimated payments for 2020.
Again, because the Coronavirus (COVID-19) is an ever-evolving situation, please be sure to connect with a tax professional if you have any questions about your personal or business tax deadlines.
Attorney R. Nicholas Nanovic counsels families in the administration of estates including large, complex estates involving trusts and complex tax matters. Nick is a certified Accredited Estate Planner® designee by the National Association of Estate Planners and Councils.