The Internal Revenue Service has taken various measures to provide tax relief during the coronavirus pandemic. The most recent initiatives includes giving taxpayers — both individuals and businesses — more time to file and pay their tax returns, providing individual retirement account rollover relief, and launching new filing tools.
The IRS announced in mid-April that taxpayers “generally had” until July 15, 2020, to file and pay federal income taxes originally due on April 15 — with no late-filing penalty, late-payment penalty or interest due.
Individuals, corporations and other entities (such as trusts and estates) now have been given until July 15 to make their 2019 payments, as well as their estimated quarterly tax payments for both the first and second quarters of 2020, without penalty.
The extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. “Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time,” the agency explained. “This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.”
Individuals needing extra time can request an extension to Oct. 15, 2020, though they must pay any taxes owed by July 15 to avoid interest and penalties.
CARES Act Updates
Also, the IRS issued guidance about tax relief tied to the $2.2 trillion stimulus package, also known as the Coronavirus Aid, Relief and Economic Security, or CARES act.
For taxpayers with net operating losses that are carried back, the IRS is:
• waiving the carryback period in the case of a NOL arising in a tax year starting after Dec. 31, 2017, and before Jan. 1, 2021;
• disregarding some amounts of foreign income subject to transition tax that normally would have been included as income during the five-year carryback period; and
• waiving or reducing a carryback period, or revoking an election to waive a carryback period, for a taxable year that started before Jan. 1, 2018, and ended after Dec. 31, 2017.
The IRS also extended the time to file Form 1045 or Form 1139 — with respect to the carryback of a NOL that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019 — for six months.
Individuals, trusts and estates should file Form 1045, while corporations should complete Form 1139.
The IRS also issued Revenue Procedure 2020-23, allowing eligible partnerships to file amended partnership returns using Form 1065 (U.S. Return of Partnership Income), checking the “Amended Return” box and issuing amended Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners.
(Partnerships filing such amended returns must write “FILED PURSUANT TO REV PROC 2020-23” at the top of their latest returns.)
The Treasury Department and IRS also launched a new web tool on IRS.gov that enables quick registration to receive Economic Impact Payments — also known as Recovery Rebates — faster and was designed to “help millions of people” who don’t usually file a tax return, they said.
The first stimulus checks hit eligible Americans’ bank accounts on April 13. The precise date of the payments will depend on how long individual banks typically take to process direct deposits.
“This process will repeat every week until all economic impact payments (EIPs) are processed,” according to House Ways and Means lawmakers The checks will be issued in reverse “adjusted gross income” order — starting with people with the lowest income first, the lawmakers said.