Hantzmon Wiebel COVID-19 Action Plan
March 19, 2020, Update
Dear Hantzmon Wiebel Clients,
Yesterday, the IRS issued guidance as to the announced 90-day extension of time to pay federal taxes owed for many taxpayers.
Here are the key take-aways:
- The Treasury and IRS have NOT extended the filing deadline. The relief currently does not cover an extension of time to file income tax returns that are due April 15.
- Individuals, trusts and estates can defer up to $1 million of tax liability due April 15 until July 15 without penalty or interest. This includes both 2019 balances owed and 1st quarter 2020 estimated tax payments. The relief does not apply to payments of any other taxes (payroll, excise, etc.) also due April 15. The second quarter 2020 estimated tax payments that are due June 15 are also not deferred.
- Amounts deferred in excess of $1 million, as well as deferred payments made after July 15, will incur penalties and interest. The 2019 balance due and the 1st quarter estimated tax payments must be combined for the purposes of determining the $1 million relief limitation.
- We recommend payment of amounts in excess of the $1 million limitation by April 15 to avoid potential penalties and interest on the underpayment.
- Corporations owing less than $10 million may also defer their federal tax payments to July 15. Please consider the aggregate amount of the 2019 taxes due and the estimated 1st quarter tax payment for determining the relief limitation.
- This payment extension only applies to federal payments at this time. State filing and payment obligations are not covered by the IRS guidance. Each state is addressing filing and payment obligations at their individual state level. We will continue to monitor the various states and their guidance in these matters.
We strongly recommend that our clients provide information to us as soon as it is available to ensure that anyone due a refund can file a timely return and those with taxes due are able to get an accurate picture of what will be due July 15.
If you have any questions regarding your return or payments, please reach out to your Hantzmon Wiebel team member via email or by phone.
We will continue to keep you updated as more information becomes available.
The Hantzmon Wiebel Team