In response to practitioners’ questions about the filing and payment deadline extension announced Friday in Notice 2020-18 (discussed here), the IRS posted 24 questions and answers on its website Tuesday. The answers clarify that only payments that are actually due on April 15 are delayed. Therefore, first quarter 2020 estimated income tax payments and Sec. 965(h) transition tax installment payments due April 15 are postponed until July 15, but June 15 estimated tax payments are not.
The relief does not apply to estate and gift taxes or payroll and excise taxes or to information return filings.
The IRS explains in the FAQs that taxpayers who cannot file and pay their tax by July 15 should file for an extension until Oct. 15 and pay the tax they estimate is due when they file the extension request, which they have until July 15 to do.
The FAQs also explained to taxpayers who have already filed their return and scheduled a payment for April 15 that the payment will not be automatically delayed to July 15, and they explained how taxpayers can cancel a payment and reschedule it to July 15 if that is what they want to do.
The IRS answered several questions about retirement plan deadlines that are delayed by the extension. First, IRA contributions for 2019 can be made until July 15, and the Sec. 72(t) 10% additional tax on early distributions is due July 15 when the taxpayer pays his or her income tax. Likewise, contributions to health savings accounts for 2019 can be made as late as July 15.
The IRS emphasized that other deadlines were not extended. For example, claims for refund for the 2016 tax year were not postponed past April 15, 2020.
The IRS noted that it was considering issuing additional guidance besides the FAQs, noting that they are responses to general inquiries and not “citable as legal authority.”
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— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.