IRS provides guidance on COVID-19 extension of tax payments

The IRS released Notice 2020-17 Wednesday afternoon, providing guidance on the tax payment extension announced by Treasury on March 17.

Any "Affected Taxpayer" with a federal income tax payment due on April 15 can delay payment until July 15, 2020, in an amount up to the "Applicable Postposed Payment Amount." No interest or penalties will be applied from April 15, 2020, to July 15, 2020, on amounts otherwise due on April 15.

The maximum amount that can be deferred is $1 million for individuals and other non-corporate tax filers and $10 million for corporations. The $10,000,000 applies for each consolidated group or for each C corporation that does not join in filing a consolidated return. The $1 million limit is the same regardless of filing status, so the same if filing single or married filing jointly.

The payment relief is available for income tax payments (including self-employment tax) due for the 2019 taxable year and for 2020 estimated tax payments (including self-employment tax) due on April 15, 2020.

The maximum amounts apply in the aggregate. For example, if an individual has a $600,000 balance due in 2019 and a $500,000 estimated tax payment in 2020, they can only defer payments up to $1 million. The excess of $100,000 must be paid in by April 15 to avoid interest and penalties for late payment.

There is no extension of the actual filing date so a tax return or extension must be filed on April 15.

The notice does not provide for the extension of payment or deposit of any other type of federal tax, or for the filing of any tax return or information return.