Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns

The Coronavirus (COVID-19) pandemic has officially disrupted the 2019 tax filing season. On March 13, 2020, President Trump issued an emergency declaration under the Disaster Relief and Emergency Assistance Act. The emergency declaration instructed Steven Mnuchin, the Secretary of the Treasury, to provide tax deadline relief to Americans affected by the COVID-19 pandemic under section 7508A(a). As a result, on March 18, 2020, the Department of the Treasury and the IRS released Notice 2020-18, which superseded and restated its earlier Notice 2020-17. The Notice provides relief to "affected taxpayers," which I will detail below.

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Overview of the extended filing notice - How has the Coronavirus affected tax filing season?

As stated, section 7508A(a) allows the Secretary of the Treasury to offer relief for acts mandated by internal revenue laws for those affected by a Federally declared disaster. Notice 2020-18 expanded the relief to those affected by COVID-19, resulting in a more expansive relief offering to U.S. taxpayers.

Under Notice 2020-18, the Secretary states that any person with a Federal income tax payment or tax return due on April 15, 2020 is affected by the COVID-19 emergency declaration. A "person" is an individual, an estate, a trust, partnership, corporation, etc. Therefore, any U.S. taxpayer required to file and pay tax on April 15 is eligible for timely filing relief under the Notice. This should apply to most taxpayers, especially individuals.

Tax Relief Provided - when is your tax return due?

As stated, the COVID-19 emergency declaration relief now applies to any person with a Federal tax return/payment (this includes tax payments related to self-employment) due on April 15, 2020. For consistency with language, I will continue to use the term "affected taxpayer." So, when is the 2019 tax return due for affected taxpayers?

The due date for your Federal tax return and tax payment is automatically extended to July 15, 2020. To receive this tax return postponement, you do not have to file the tax extension forms, including the Form 4868 and Form 7004. Additionally, the postponement of the tax payment is not limited by an amount threshold. In other words, the threshold amounts described in Notice 2020-17 ($1,000,000 and $10,000,000) no longer apply.

No penalties, interest, or additional tax will accrue during the period of automatic extension from April 15 through July 15. This period will be disregarded in the calculation of such late-payment penalties. An individual who does not file his or her tax return and/or pay his or her tax liability by the postponed date of July 15 will be subject to interest and penalties beginning on July 16, 2020.

Federal tax payments not eligible for postponement

The tax filing relief extension does not apply to certain types of tax payments due and certain types of Federal information returns. No extension is provided for the following:

Federal Tax
  • gift tax
  • generation-skipping transfer tax
  • employment tax
Federal information returns
  • Form 709
  • Form 706 GS(D)
  • Form 3250
  • Form 5277
  • Form 1041-A
Lastly, it is important to note that the timely filing relief extension does not apply to fiscal year taxpayers, meaning taxpayers with a Federal income tax return due other than on April 15, 2020.

Please share the post with others to help them learn about the tax filing changes caused by the Coronavirus. It is important to stay up-to-date on the latest tax notices. I hope you now have a strong understanding about Notice 2020-18, or the relief from timely filing for your 2019 Federal income tax return.