8502 / How are 2020 federal income tax filing and payments requirements impacted by the COVID-19 pandemic?

The IRS released FAQ that clarifies that the filing and payment extensions (from April 15 to July 15 in 2020) applied regardless of whether the taxpayer was sick or quarantined because of COVID-19. The time deadline for making a 2019 IRA contribution (or pay the 10 percent penalty tax for distributions included in income) was also extended to July 15. Employees who made excess deferrals to a retirement plan and were required to remove those amounts by April 15 remained subject to the April 15 deadline. The deadline for making HSA and MSA contributions for 2019 was moved to July 15, 2020.

For fiscal year taxpayers with 2019 returns due April 15, the deadline was extended to July 15 regardless of whether April 15 was an original or extended filing deadline.

The relief did not apply to payroll or excise tax payments (deposit dates remained unchanged, but employers may have been eligible for the COVID-related tax credits, see Q 8553).

Taxpayers did not have to do anything to take advantage of the extension--they simply filed their returns and made required payments by the July 15 deadline.

For taxpayers whose federal income tax return filing due date was postponed from
April 15 to July 15, 2020, the due date of that taxpayer’s Section 965 installment payment was also postponed to July 15, 2020.

For any taxpayer whose federal income tax return filing deadline was postponed from April 15 to July 15, 2020, the due date for Form 8991 and the BEAT payment was also postponed to July 15, 2020.²

Taxpayers who wished to make a claim for a refund based on the 2016 tax year (which had to be made by April 15, 2020) remained subject to the April 15 deadline. The relief similarly did not change the deadlines for making 2019 estimated tax payments.

Subsequent IRS guidance in Notice 2020-23 expanded relief to taxpayers with a federal filing or payment obligation arising after April 1, 2020 and before July 15, 2020. Specifically, deadlines were extended to July 15, 2020 for actions required with respect to (1) estate and trust income tax payments and return filings, (2) estate and generation-skipping transfer tax payments and return filings on Form 706 and related forms, (3) gift and generation-skipping transfer tax payments and return filings on Form 709 and related forms, (4) estate tax payments of principal or interest due as a result of an election made under IRC Sections 6166, 6161, or 6163 and annual recertification requirements under Section 6166.

Similarly, taxpayers who faced deadlines with respect to Tax Court actions between April 1 and July 15 had their deadlines postponed until July 15.

Notice 2020-23 also gave the IRS itself an additional 30 days to perform certain time-sensitive actions with respect to “affected taxpayers” made difficult because of a lack of access to information during the COVID-19 outbreak. “Affected taxpayers” is defined as follows:

(1)   persons who were currently under examination (including an investigation to determine liability for an assessable penalty under subchapter B of Chapter 68);

(2)   persons whose cases were with the Independent Office of Appeals; and

(3)   persons who, during the period beginning on or after April 6, 2020 and ending before July 15, 2020, filed written documents described in IRC Section 6501(c)(7) (amended returns) or submitted payments with respect to a tax for which the time for assessment would have otherwise expired during this period.

The 30-day extension applied if the last date for performance of the action was on or after April 6, 2020, and before July 15, 2020.³