The U.S. Treasury Department issued guidance under Notice 2020-17 (the “Notice”) which provides relief for persons determined to be affected by the COVID-19 emergency.
U.S. Treasury Secretary Steve Mnuchin determined that any person with a Federal income tax payment due April 15, 2020 is affected by the COVID-19 emergency for purposes of the Notice (the “Affected Taxpayer“). Under the Notice, Affected Taxpayers will have their Federal income tax payment due date of April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, postponed until July 15, 2020. Consolidated groups (as defined in Section 1.1502-1 of the Code) and standalone C corporations that do not join in filing a consolidated return will be able to postpone Federal income tax payments of up to $10 million. All other Affected Taxpayers will be able to postpone Federal income tax payments of up to $1 million, regardless of filing status. For example, an Affected Taxpayer can only postpone Federal income tax payments up to $1 million whether filing as a single individual or married individuals filing a joint return. Individuals and corporations must still file their returns (or an extension) by the April 15, 2020 deadline.
The Notice also provides relief for Affected Taxpayers with estimated Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.
The calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by the Notice will be disregarded for the period beginning on April 15, 2020, and ending on July 15, 2020.
For additional information on recent tax developments, please contact Jonathan P. Brose (212-574-1615), James C. Cofer (212-574-1688), Ronald P. Cima (212-574-1471), Peter E. Pront (212-574-1221), Daniel C. Murphy (212-574-1210), Brett R. Cotler (212-574-1269) or Tyler J. Combest (212-574-1472).
Seward & Kissel has established a COVID-19 Resource Center on our web site to access all relevant alerts that we distribute.