Updated Income Tax Filing and Payment Extension Information

March 27, 2020

Dear Clients and Friends,

As we have previously reported, the Internal Revenue Service announced Federal income tax return filing and payment relief by moving the due date for filing tax returns and paying the related taxes from April 15th to July 15th. The Service has released guidance as to which tax returns and their related payments are eligible.

The relief applies only to Federal returns with a filing or payment date of April 15, 2020, and specifically does not apply to Federal income tax returns and payments due on any other date. Thus, the relief applies to individual income tax returns; individual first quarter estimated tax payments; fiduciary income tax returns for trusts and estates; and corporate income tax returns for C corporations.

It is important to note the relief does not apply to S corporations, partnerships, LLCs, and tax-exempt entities unless they have a fiscal year end and their filing date is April 15th. The relief does not apply to estate and gift tax returns and payments. If you are filing a gift tax return for 2019, you should file on or before April 15th or request an extension of time to file, even though an extension is not required for your individual income tax return.

2019 Income Tax Returns

The payment deferral applies regardless of when the tax return is filed. Taxpayers who have already filed their 2019 returns, but have not paid the balance due, may postpone payment until July 15th. If a taxpayer is unable to file on or before July 15th, an automatic extension of time to file is available. As in the past, any balance due should be paid with the extension request. The relief does not change the estimated tax requirements or estimated tax penalty for 2019 returns. The IRS has further clarified that the due date for making 2019 contributions to IRAs and HSAs has also been delayed to July 15th.

2020 Estimated Tax Payments

The IRS has clarified due dates of estimated payments, which differs from our previous email. The relief applies only to 2020 estimated tax payments due April 15th. The June 15th due date for the second estimated tax payment has not been changed. It is interesting to note the second quarter payment due date is prior to the first quarter payment that is now due on July 15th. The due dates of third and fourth quarter estimated tax payments are not changed.

Illinois State Income Tax Returns and Payments

Illinois has formally followed the Federal change. All taxpayers who file and pay their Illinois income taxes on April 15, 2020 are automatically extended until July 15, 2020. The relief is automatic, and no filing is required to qualify. Unlike the IRS, the deadline for the first and second installments of estimated payments for 2020 taxes that are due April 15th and June 15th remain the same.

Information continues to change rapidly. Our team continues to work remotely and will be available to answer your questions on these and other matters during these turbulent times. Please contact us in any way we may help.