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Relief for Taxpayers Affected by Coronavirus Disease 2019 (COVID-19) Pandemic

The recent COVID-19 pandemic has already had a significant effect on our personal and professional lives.  Between states and localities implementing “shelter-in-place” orders, commercial activity grinding to a near halt, and the stock market seeing massive losses, the United States has taken a severe economic hit as well.  Many taxpayers may be wondering how the COVID-19 virus will affect tax obligations given the rampant financial hardship and uncertainty in the United States. Here is what to know.

IRS Extends Filing Deadline and Federal Tax Payments

The IRS announced on March 21, 2020, that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020See IR-2020-58 (News Release, 03-21-2020); also see IRS Notice 2020-17 (Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic).

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed.  Id.  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.  Id.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.  Id.  Individual taxpayers who need extra 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. Id. Businesses who need additional time must file Form 7004.  Id.

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.  Id.

The IRS states that it will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.  See https://www.irs.gov/newsroom/tax-day-now-july-15-treasury-irs-extend-filing-deadline-and-federal-tax-payments-regardless-of-amount-owed

California Franchise Tax Board Extends Filing Deadline and Tax Payments

The Franchise Tax Board (FTB) announced on March 18, 2020, updated special tax relief for all California taxpayers due to the COVID-19 pandemic.  FTB is postponing until July 15, 2020, the filing and payment deadlines for all individuals and business entities for:

  • 2019 tax returns
  • 2019 tax return payments
  • 2020 1st and 2nd quarter estimate payments
  • 2020 LLC taxes and fees
  • 2020 Non-wage withholding payments

To give taxpayers a deadline consistent with that of the IRS without the federal dollar limitations, the FTB is following the federal relief described in IRS Notice 2020-17.  Since California conforms to the underlying code sections that grant tax postponements for emergencies, the FTB is extending the relief to all California taxpayers.  Taxpayers do not need to claim any special treatment or call the FTB to qualify for this relief.

For further information, please refer to the FTB’s website at https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-3-state-postpones-tax-deadlines-until-july-15-due-to-the-covid-19-pandemic.html