On March 13, 2020, a state of national emergency was declared in response to COVID-19. Here’s what that means for your taxes.

 

Updated September 16, 2020

In the week that followed the declaration of a state of national emergency on March 13, 2020, the Internal Revenue Service released two notices regarding tax relief in response to the coronavirus pandemic. Here’s what you need to know.

The first notice (Notice 2020-17, released on March 18, 2020) was almost immediately superseded by the second notice (Notice 2020-18, released on March 20, 2020). So, let’s just focus on Notice 2020-18 since it supersedes the first one.

What This Means for You

It’s important to first understand the key difference between filing a tax return and paying any taxes due. These are two separate things.

Basically, US taxpayers now have until July 15, 2020, to file their 2019 tax returns and pay any 2019 taxes due. This applies to any taxes that would have been due April 15, including quarterly tax payments, corporate taxes, and self-employment and payroll taxes. As long as you pay your 2019 taxes by July 15, 2020, all penalties and interest will be waived.

Note that this postponement is automatic. No action is required on your part to receive it. You do not need to fill out any forms or make any phone calls — it happens automatically.

If you file an extension, the extension will run from April 15, not July 15. This means that, if you file an extension, your return will be due October 15, 2020.

One more critical note: this is only relevant to federal tax returns. Although many states have already extended their deadlines and more will follow suit, you must check with your individual state’s guidance to ensure you do not accrue any penalties or fees due to late payment.

What it comes down to is this: you can relax a bit. You have a three-month reprieve. That’s one less thing to worry about right now.