Member Article

On March 20, Treasury Secretary Steven Mnuchin announced by tweet that the April 15 deadline for filing tax returns will be postponed to July 15: "At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties."

Later on March 20, the IRS published Notice 2020-18 to memorialize the extension. Importantly, the Notice not only extends the filing date but also removes the cap on the amount of tax payment that can be postponed (earlier guidance provided a $1 million cap on individual income tax payments and a $10 million cap on tax payments for corporate taxpayers). There is now no limitation on the amount of payment that may be postponed.

Further, estimated tax payments due on April 15, 2020 (i.e., for the 2020 tax year) are also automatically extended to July 15, 2020.

Congress was separately readying a legislative fix to extend the tax filing deadline. On March 19, Senate Majority Leader Mitch McConnell introduced the Coronavirus Aid, Relief, and Economic Security Act (the "CARE Act"). Among its various provisions, the Care Act provides for an amendment to sections of the Internal Revenue Code to extend filing and payment deadlines for 2019 tax returns from April to July. Under the proposed legislation, estimated tax payments would not be not due until October 15, 2020.

Interestingly, the CARE Act also provides for corrections and changes to the Tax Cuts and Jobs Act, including amendments to correct the so-called "retail glitch" which limited available bonus depreciation of qualified improvement property, an increase in the interest deduction limit from 30 percent to 50 percent, as well as modification of the downward attribution rules for controlled foreign corporations.

Interested taxpayers or their representatives should contact Christopher Karachale or Daren Shaver with any questions.