Many people have asked about the latest public announcements regarding paying your taxes and the time for filing. The below is a more thorough explanation of those announcements and a bit of clarification.
The IRS has issued official guidance clarifying that the 90-day extension for payment of taxes does not apply to the March 15 or April 15 filing deadlines. (IRS Notice 2020-17) This means that even though the actual tax payment has been deferred until July 15, 2020, for most taxpayers, they must still file a timely extension request to avoid the late-filing penalty (or, in the case of the missed March 15 filing deadline, request penalty abatement if late-filing penalties are imposed).
Any person with a federal income tax payment due April 15, 2020, who is affected by the COVID-19 emergency is eligible for the following relief:
- Deferral of up to $1 million in aggregate for all taxpayers other than C corporations, regardless of filing status (so the $1 million limit applies to joint filers); or
- Deferral of up to $10 million in aggregate for C corporations (the $10 million limit applies at the consolidated group level if the corporation is part of a consolidated group).
The relief only applies to:
- 2019 income tax payments due on April 15, 2020 (including self-employment taxes); and
- The April 15, 2020, estimated income tax payment due on April 15, 2020, for the 2020 taxable year (including self-employment taxes).
This federal relief is granted under IRC §7508A, which California conforms to. As a result, we believe California conforms to the July 15 payment extension, waiting for FTB confirmation.
Should you have questions about the deadlines or any other concerns, please give us a call. Our HKG team still needs all your information as soon as it is available (electronically preferred) to estimate the liability for 2019 and file your return(s) or extension(s), including 2020 1st quarter estimates.
Prior to joining HKG, she served as CFO and VP Controller of a biotech public company and VP Controller of a PE backed company. Prior to these roles, she was an Audit Partner with Ernst & Young in Los Angeles, leading audit teams and other financial engagements for numerous public and private healthcare and biotech companies.
She has served on the Board and/or Committees of Self Employment Loan Fund; Southern California Biomedical Association, O&E Workplace Advocates and Union Station Homeless Services. She is a two-time Finalist in LA Business Journal’s “Women Making a Difference”.