Treasury/IRS Extend Federal Filing Deadline and Tax Payments Regardless of Amount Owed

The Treasury Department and Internal Revenue Service announced officially on Saturday, March 21^st that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Earlier they had announced that taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest.

The official statement over the weekend confirmed that the extend filing deadline and federal tax payments would be applied regardless of amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. This is revised from their earlier announcement that included limitations up to 1 million for individuals regardless of filing status and 10 million for corporations.

It is important to note:

• NO ADDITIONAL FILING FORMS NEEDED. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

• DO NOT STOP PROCESSING YOUR RETURNS. The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

• MARYLAND STATE REQUIREMENTS ARE ALIGNING WITH THE NEW DEADLINES. HOWEVER, NOT ALL STATES ARE. The new deadline announced applies to federal tax income payments only. It’s up to states to set their own deadlines. Maryland business and individual income taxpayers are afforded the same relief. No interest or penalty for late payments will be imposed if 2019 tax payments are made by July 15, 2020. For state tax developments related to the coronavirus outbreak, see the American Institute of CPA’s list here.

KatzAbosch is still working and operating to file individual and business information in a timely manner. We will continue to monitor the situation as the IRS releases more guidance.

As a reminder, KatzAbosch does offer various secure electronic options to deliver documents to us during tax time. Please contact your KatzAbosch representative if you are not currently enrolled in any of our electronic file sharing systems and wish to do so. They will work with you to select the best electronic option for you. If you do not recall your KatzAbosch representative, please dial our main number: 410.828.2727 and we would be happy to connect you.

If you have questions or concerns on how this may impact your situation, please contact us.