IRS Deadlines, State Deadlines and SBA Loan Information
Here is a recap of current developments and resources:
Federal Filing Dates
Treasury Secretary Steven Mnuchin has officially extended the tax filing deadline to July 15, 2020, giving taxpayers more time to file their taxes in the midst of the coronavirus pandemic. Taxpayers do not need to file Forms 4868 or 7004 to qualify for the delay in filing returns.
Please see the Further Guidance section at the end of this message for more details regarding IRS deadlines.
State Filing Dates
Each state will make its own decision on its tax return filing and tax payment dates. Minnesota Governor Walz and Commissioner Bauerly have stated they are working to shift the Minnesota income tax filing deadline to July 15th. Please check with your state and local taxing authorities for updates.
SBA Business Loan Availability
U.S. Small Business Administration (SBA) disaster loans now available. This may be one of a few financing options you have available between your local bank and the SBA, depending on your individual situation and whether you already have a line of credit in place. The Electronic Loan Application process requires submission of several documents and we advise that you begin the process as soon as possible.
SBA Economic Injury Disaster Loan web page: https://disasterloan.sba.gov/ela/Information/EIDLLoans
Although the tax deadline has been extended, we ask that you send in your tax information as soon as possible so we can get started, if you haven’t done so already. Lenders will ask for your most recent tax returns and likely year-to-date financials if applying for credit, so we want you to be in a good position to provide this information. Our staff are working diligently from their home offices to meet the needs of our clients during this challenging time.
- Access the ADP Employer Preparedness Toolkit .
- Information for small businesses affected by coronavirus: sba.gov/coronavirus
- All coronavirus-related federal government resources: usa.gov/coronavirus
- MN DEED’S COVID-19 information and resources for businesses COVID-19 update page.
For more detail on IRS deadlines, here is the full text our alliance partner Eide Bailly’s analysis:
Notice 2020-18, released by the IRS late March 20, 2020, follows up Treasury Secretary Steven Mnuchin’s Twitter announcement earlier in the day that the IRS is postponing the April 15 deadline for filing federal income tax returns until July 15, 2020. This new notice supersedes an earlier IRS notice (Notice 2020-17) that did not, as anticipated, delay the date for filing returns due on April 15, 2020, but did defer federal income tax payments until July 15, 2020, subject to certain limits.
This new guidance automatically extends the due date for filing 2019 income tax returns due April 15, 2020 until July 15, 2020. Taxpayers do not need to file Forms 4868 or 7004 to qualify for the delay in filing returns.
In addition, unlike the earlier notice, federal income tax payments (including payments of self-employment tax) in any amount can be deferred to July 15, 2020. The $1Million and $10Million limits required in Notice 2020-17 have been removed. The amount able to be deferred to July 15, 2020 includes the balance due for a taxpayer’s 2019 federal income tax return, and the 2020 estimated tax payment payable on April 15, 2020.
Taxpayers eligible for the new extension of the time to file, and deferral of tax payable, include individuals, trusts, estates, partnerships, associations, companies, and corporations that have a federal income tax payment or income tax return due on April 15, 2020. The IRS will automatically waive the usual interest and penalties that apply to late tax payments and late filing of returns so long as the deferred payments are made by July 15, 2020. Any tax amount due to be paid at the end of the deferral period, and not paid, will accrue interest and potential penalties beginning July 16, 2020.
At this time, we do not have any guidance available on whether extensions will need to be filed on July 15, 2020 to extend a return filing to the usual extended deadlines or a later date.
Each state will need to separately address its own extensions of tax filing and payment dates. The AICPA is keeping an up-to-date listing of state filing guidance in response to the coronavirus here. The Federation of Tax Administrators also has links to state filing guidance here.
The extension of time does not apply to other types of federal returns, such as those for payroll taxes, excise taxes and gift or estate taxes. The relief provided in Notice 2020-18 is solely available with respect to federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, for the 2019 tax year and estimated Federal estimated payments (including payments of tax on self-employment income) due on April 15, 2020 for the 2020 tax year.
Stay safe and remember we’re here for you.
April 15 Tax Deadline Update
On March 18, 2020, the IRS released Notice 2020-17, its guidance addressing the April 15 tax deadline in connection with the Coronavirus Emergency Declaration. Taxpayers will generally be allowed to defer tax payments due on April 15, 2020, until July 15, 2020. You can read the official release here.
The notice makes clear that the guidance is being provided only for income tax by stating, “No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any other tax return or information return.”
Who Can Defer Tax Payments?
Individuals and married taxpayers filing joint returns who expect to owe $1 million or less when they file their 2019 form 1040 can delay payment of the tax due on April 15, 2020 until July 15, 2020. Corporations, including each consolidated group, owing $10 million or less on their form 1120 can also delay payment of the tax due on April 15, 2020 until July 15, 2020.
The IRS is also deferring payment of 2020 quarterly estimated tax payments, which would otherwise be due April 15, 2020, for calendar year individuals and corporations. However, the amount able to be deferred will be aggregated with the income tax deferral amount for applying the total amount available for deferral. The total of the income tax deferred and the estimated tax payment deferred cannot exceed the stated limitation amount. For individuals, the federal tax payments that can be deferred include the tax on self-employment income.
The IRS will automatically waive the usual penalties that apply to late tax payments as long as the deferred payments are made by July 15. Any amounts due in July in excess of the $1 million or $10 million limits will be subject to interest, penalties and any other applicable additions to tax.
Do Returns Need to be Filed by April 15?
At this point the IRS has not extended the filing deadline for individual and corporation calendar year 2019 returns. Therefore, returns should be filed or extended as required by April 15, 2020, in the usual manner. While an extension defers the filing date until October 15, 2020, any taxes owed, up to the specified maximum amounts, will still need to be paid by July 15, 2020, to get the penalty, interest or failure to file relief.
What About State Tax Deadlines?
Each state is separately addressing its own extensions of tax filing and payment dates. For state tax developments related to the Coronavirus outbreak, see the AICPA list here for updates.
At this time the Minnesota Department of Revenue has not yet delayed the April 15th income tax payment due date. Minnesota is, however, granting a 30-day Sales and Use Tax grace period for businesses identified in Executive Order 20-04. During this time the department will not assess penalties or interest. Identified businesses with a monthly Sales and Use Tax payment due March 20, 2020, will have until April 20 to make that payment. These customers should still file their return by March 20. At this time, this grace period for penalty and interest is only for monthly filers and only for the March 20 payment. Identified businesses can request additional relief from penalty and interest for reasonable cause after April 20.
As we continue to monitor the COVID-19 situation, we want to take a few minutes to reach out to our clients, friends, and community.
As we’re sure you are aware, we are in the heart of the busiest time of year and are focused on serving and advising you. We sincerely hope that you, your families, and your team members are staying healthy and taking the necessary precautions to continue to stay healthy.
Here is an update on the steps we are taking to ensure to the best of our ability that we keep you and our team members healthy.
We have the right technology.
PWB CPAs & Advisors has the technology in place to allow our team members to work from virtually anywhere with an internet connection. Our professionals are equally effective working remotely as they are in the office, and many of our staff will be working remotely.
We are limiting face-to-face meetings.
While our offices will remain open, we encourage you to use alternative methods of delivering information and communicating with your PWB professional. We have a number of tools available to enable us to exchange information securely together.
- Client Portal. Most of you have this set up with us and are familiar with its use. If you do not have a portal, one can be easily established for you by contacting your PWB professional.
- Encrypted email. We can send you an encrypted email that protects the content and you can reply with your confidential information, knowing that it will remain encrypted.
- SafeSend Return delivery system. This is our secure on-line tax return delivery system, allowing you to receive, review and sign your tax returns on-screen. Of course, you can also receive your returns in your client portal.
- Remote meetings. We use Microsoft Teams as a unified communication system. This system is available to us wherever we are working. We can also use this tool for virtual meetings with our clients, where we can share video and screens. Just about like being there!
- In the event of a mail service disruption, we also offer free credit card payments and electronic fund transfer/ACH.
We are monitoring federal, state, and local government updates.
Should there be a quarantine, we will do everything in our control to ensure that we are still available by phone, email, or video, with as little disruption to our services as reasonably possible.
PWB is committed to serving and advising you today as always. You are welcome to contact the firm with any questions or concerns at 763-550-1100.