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Updated: Deferring Tax Filings and Payments Amid COVID-19 Emergency

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| Legal Advisory

This advisory was originally posted on March 20, 2020. The following are the most recent updates as of April 10, 2020.

On March 13, 2020, the President of the United States issued an emergency declaration granting the Internal Revenue Service (“IRS”) the authority to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency (the “Emergency Declaration”). Pursuant to the Emergency Declaration, on March 18, 2020 the IRS released Notice 2020-17, in which the IRS offered taxpayers guidance on deferring federal tax payments. On March 20, 2020 the Department of the Treasury followed up with an announcement that the April 15, 2020 filing deadline would also be extended to July 15, 2020 to allow individuals and businesses additional time to file. On March 20, 2020, the IRS released Notice 2020-18 which restates and expands upon the relief provided in Notice 2020-17. On April 9, the IRS released Notice 2020-23, which amplified Notice 2020-18 and provided for additional relief for taxpayers affected by the COVID-19 emergency.

Extension of the April 15th Payment Deadline

Pursuant to Notice 2020-23, generally now all taxpayers with a federal filing or federal tax payment deadline between April 1, 2020 and July 15, 2020 have until July 15, 2020 to file or make a payment. Such postponed payment obligations and filing obligations include:

  • Individual federal income tax payments and return filings on:
    • Form 1040, U.S. Individual Income Tax Return,
    • Form 1040-SR, U.S. Tax Return for Seniors,
    • Form 1040-NR, U.S. Nonresident Alien Income Tax Return,
    • Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents,
    • Form 1040-PR, Self-Employment Tax Return - Puerto Rico, and
    • Form 1040-SS, U.S. Self-Employment Tax Return
  • Calendar year and fiscal year corporate federal income tax payments and return filings on:
    • Form 1120, U.S. Corporation Income Tax Return,
    • Form 1120-C, U.S. Income Tax Return for Cooperative Associations,
    • Form 1120-F, U.S. Income Tax Return of a Foreign Corporation,
    • Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation,
    • Form 1120-H, U.S. Income Tax Return for Homeowners Associations,
    • Form 1120-L, U.S. Life Insurance Company Income Tax Return,
    • Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons,
    • Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return,
    • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations,
    • Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts,
    • Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies,
    • Form 1120-S, U.S. Income Tax Return for an S Corporation, and
    • Form 1120-SF, U.S. Income Tax Return for Settlement Funds
  • Calendar year or fiscal year partnership federal return filings on:
    • Form 1065, U.S. Return of Partnership Income, and
    • Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return
  • Estate and trust federal income tax payments and return filings on:
    • Form 1041, U.S. Income Tax Return for Estates and Trusts,
    • Form 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts, and
    • Form 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts
  • Estate and generation-skipping transfer tax payments and return filings on:
    • Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return,
    • Form 706- NA, United States Estate (and Generation-Skipping Transfer) Tax Return,
    • Form 706-A, United States Additional Estate Tax Return,
    • Form 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts,
    • Form 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations,
    • Form 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions, and
    • Form 706-GS(D-1), Notification of Distribution from a Generation Skipping Trust (including the due date for providing such form to a beneficiary)
  • Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, filed pursuant to Rev. Proc. 2017-34
  • Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent
  • Gift tax payments and return filings on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return
  • Annual returns (including Form 990 series) of organizations exempt from tax under Internal Revenue Code section 501(a)
  • Exempt organization business federal income tax payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return
  • Excise tax payments on investment income and return filings on Form 990-PF, Return of Private Foundation

  • Excise tax payments and return filings on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code
  • Quarterly estimated federal income tax payments on:
    • Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations,
    • Form 1040-ES, Estimated Tax for Individuals,
    • Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals,
    • Form 1040-ES (PR), Estimated Federal Tax on Self Employment Income and on Household Employees (Residents of Puerto Rico),
    • Form 1041-ES, Estimated Income Tax for Estates and Trusts, and
    • Form 1120-W, Estimated Tax for Corporations

Calculation of Interest and Penalties

With respect to federal income tax payments, the period beginning on April 15, 2020 and ending on July 15, 2020 will be excluded in any calculation of interest and penalties on federal income tax payments postponed. As such, interest and penalties on such postponed payments will begin to accrue on July 16, 2020.

Refunds Not Expected to be Affected

The Secretary of the Treasury stated in a press briefing on March 17, 2020 that refund issuances will not be affected for those taxpayers who do file and pay their taxes by April 15, 2020. On March 20, 2020, the Secretary of the Treasury encouraged all filers owed a refund to file their returns promptly.

Massachusetts Tax Relief Measures

On March 27, 2020, Governor Charlie Baker announced with the President of the Senate and the Speaker of the House that Massachusetts will extend the state individual income tax filing and payment deadline from April 15, 2020 to July 15, 2020. This relief is automatic and taxpayers do not need to file any form to qualify. This extension does not apply to corporate filers.

Massachusetts announced administrative tax relief measures on March 18, 2020 for businesses impacted by the COVID-19 emergency.

  • Massachusetts will postpone the collection of sales tax and meals tax that would otherwise be due in March, April, and May until June 20, 2020 for businesses that paid less than $150,000 in sales tax plus meals taxes in the year ended February 29, 2020
  • Massachusetts will postpone the collection of room occupancy tax that would otherwise be due in March, April, and May until June 20, 2020 for businesses that paid less than $150,000 in room occupancy taxes in the year ended February 29, 2020.

All penalties and interest that would otherwise apply will be waived. 

The Massachusetts Department of Revenue announced in a Technical Information Release on March 19, 2020 that it will waive any late-file or late-pay penalties for returns and payments due during the period of March 20, 2020 through May 31, 2020 for vendors with meals tax return and payment obligations and operators and intermediaries with room occupancy excise return and payment obligations that do not otherwise qualify for the emergency relief announced on March 18, 2020. Returns must be filed and payments must be remitted on or before June 20, 2020. Note that the Technical Information Release provides for a waiver of penalties only and therefore statutory interest will accrue.

We are monitoring the evolving situation and will keep you updated on any future developments.

This advisory was prepared principally by Laura Marsell, a member of Nutter’s Tax Department. If you would like additional information, please contact any member of our Tax Department or your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.  

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