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Final Details on 90-Day Tax Payment Deferral

Final Details on 90-Day Tax Payment Deferral

The IRS has just issued Notice 2020-17 as a follow-up to Treasury Secretary Mnuchin’s statement yesterday granting a 90-day deferral in making tax payments. The Notice clarifies yesterday’s statement as follows:

  • Grants a 90-day deferral, until July 15, 2020, for the payment of the applicable taxes.
  • The amount that can be deferred is up to $10,000,000 for a C corporation (or consolidated group) or up to $1,000,000 for all other taxpayers. For an individual taxpayer, the deferral amount is the same for a single or married filing joint return.
  • The Notice only covers payments that are due on April 15, 2020. Therefore, any payments that would be due before or after April 15, 2020 are not eligible for the deferral.
  • Deferral is for 2019 income taxes, including self-employment taxes, and 2020 estimated income tax payments, including self-employment taxes, that are due on April 15, 2020. The deferral is not applicable to any other type of taxes that may be due April 15, 2020. Other taxes, such as gift taxes, would still have to be paid by April 15, 2020.
  • If the deferred payments are not made by July 15, 2020, interest and penalties will begin accruing on July 16, 2020. Any amount in excess of the allowed deferral amount that the taxpayer does not pay by April 15, 2020, will accrue interest and penalties from April 15, 2020.
  • This is not an automatic extension of the requirement to file any tax return or any information return. Therefore, the filing of either a tax return or an extension will still be required by April 15, 2020.

The IRS will be required to issue further guidance on how to make the deferred payments on July 15th.
This Notice does not pertain to state and local jurisdictions. We will monitor state and local governments to see how they react to this announcement.

UHY tax advisors will continue to monitor and provide additional information regarding the other relief provisions that the White House, Treasury and Congress have been discussing.

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