Long Overdue Updates to Tax Filing and Payment Deadlines

This post is long overdue and I apologize for not putting out anything sooner here, but the busy season has been tough, as many clients are pushing harder to get their refunds as soon as possible in these troubled times. As our country continues to cope with the Coronavirus crisis, both the IRS and states have made more changes to filing and payment deadlines for your 2019 returns as well as 2020 estimated payments. Estimated payments generally only concern self-employed taxpayers and taxpayers with significant investment income in addition to their regular salaries.

As I mentioned in my last post, any additional federal taxes owed for 2019 are due on July 15 and nearly all states have elected to follow or automatically follow federal policy in this regard. Additionally, your 2019 returns are also not required to be filed until July 15. Previously, the Internal Revenue Service and most states still required returns to be filed by April 15 despite the deadline for final payments being extended to July 15. To make everything simpler, both the final payment for the remaining amount owed for 2019 as well as the return filing are now both due on July 15. No late payment interest or penalties will be applied to federal taxes paid for 2019 so long as they are paid before July 15, 2020. However, please note that if you did not have at least 90% of your federal or state tax liability paid up before then, underpayment penalties will still apply. Additionally, while the Internal Revenue Service and most states are waiving late payment penalties and interest for payments made after April 15 but before July 15, some states are still imposing late payment interest on any 2019 payments made after April 15. Check with your state's department of revenue if you owe additional state tax for 2019 to see if interest will be charged on any payments made after April 15 but before July 15.

If you are self-employed or have a significant amount of investment income in addition to your regular salary, you normally would need to make your first quarterly estimated payment for 2020 by April 15 and your second quarterly estimated payment by June 15. However the Internal Revenue Service and most states have changed both the first and second quarterly payment due dates to July 15. While this somewhat simplifies things for taxpayers required to make estimated payments, this means 50% of your estimated tax must be made by July 15. Additionally, while nearly all states have followed the federal first quarterly payment deadline of July 15, for some states, the second quarterly payment deadline remains at June 15. In these states, this means that the state tax payment due on July 15 is based off your January, February and March income, while the state tax payment due on June 15 is based off your April, May and June income. States still following the June 15 rule for the second quarter may still move the deadline to July 15 as well. Verify this information on your state's department of revenue website.

Many clients have been asking about the federal stimulus payment and this will follow in a subsequent post. Meanwhile, continue to check the IRS website for more information and the status of your stimulus payment at: https://www.irs.gov/coronavirus/economic-impact-payments