March 27, 2020
IRS Notice 2020-18 and IRS FAQs
Internal Revenue Service (“IRS”) Notice 2020-18, issued March 20, 2020 (the “Notice”), provides updated guidance on the extension of the April 15, 2020 U.S. federal income tax return filing and payment deadlines for individuals and corporations to July 15, 2020 as a result of the Coronavirus pandemic. The extension does not require that the taxpayer be impacted by the Coronavirus pandemic. Additionally, on March 24, 2020, the IRS issued FAQs to answer various questions relating to the Notice.
The Notice and FAQs provide the following relief and guidance:
U.S. State-Level Action
A number of states have already extended their respective income tax filing and payment deadlines for the 2019 tax year, either automatically through linkage to the IRS’s extended deadlines or through separate action. Below is a list of states that assess income tax and have extended (or, where indicated with an asterisk, announced their intention to extend) their income tax filing and payment deadlines. States that have extended their deadlines for the payment of estimated taxes are explicitly noted with parentheticals below. The date listed in front of the state is the extended due date. State guidance is evolving, and we intend to supplement the below with additional updates as appropriate.
New Jersey has passed legislation that would match U.S. federal income tax extensions, but this legislation has not yet been signed into law. The New York State Assembly has announced that New York State tax filing deadlines will be extended to July 15, but this is not yet reflected in legislation or formal guidance issued by the New York State Department of Taxation and Finance.
At the local level, New York City has waived penalties for business taxes (including the unincorporated business tax, or “UBT”) due between March 16, 2020 and April 25, 2020, but as of now interest will still be assessed on all applicable tax payments received after the original due date.
Sales and Use Tax
Several states have also either deferred the payment deadline for sales and use taxes or waived penalties for late payments, though a number of these provisions are either limited to small businesses or to businesses in certain sectors. States that have taken action on sales and use taxes so far include: Alabama (waiving penalties for small businesses), California (deferred payment by 60 days), Colorado (governor directed D.O.R. to choose an extended deadline), District of Columbia (waiving penalties and interest), Illinois (waiving penalties and interest limited to certain businesses), Louisiana (deferred payment until May 20), Maryland (deferred payment until June 1), Massachusetts (deferred payment for certain taxpayers), Minnesota (deferred payment for certain businesses), Michigan (deferred payment for small businesses), New York (waiving penalties and interest limited to certain taxpayers), Pennsylvania (waiving some penalties), and South Carolina (deferred payment until June 1). For specific state sales and use tax questions, please consult your state and local tax advisor.
|||The Notice is available on the IRS website at https://www.irs.gov/pub/irs-drop/n-20-18.pdf.|
|||The Notice expressly supersedes in its entirety recently released IRS Notice 2020-17, which also provided certain guidance related to extensions of income tax return filing and payment deadlines for individuals and corporations.|
|||The FAQs are available on the IRS website at https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers.|
|||The Extension applies to the following tax year 2019 returns that otherwise were due on April 15, 2020: Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS; Form 1041, 1041-N, 1041-QFT; Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF; Form 8960; Form 8991; and Form 990-T (but only if that form otherwise was due on April 15 and not May 15).|
|||Unless indicated otherwise, all “section” references are to the Internal Revenue Code of 1986, as amended.|
Gibson Dunn’s lawyers are available to assist with any questions you may have regarding developments related to the COVID-19 outbreak. For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.
The Gibson, Dunn & Crutcher Tax Practice Group is able to assist with all U.S. federal return questions and many of these state and local tax matters. Clients should also continue to consult their specific state and local tax advisor with questions pertaining to such state and local tax matters. For further information, please contact the Gibson Dunn lawyer with whom you usually work, any member of the Tax Practice Group, or the following authors:
Benjamin Rippeon – Washington, D.C. (+1 202-955-8265, [email protected])
Evan M. Gusler – New York (+1 212-351-2445, [email protected])
Jennifer Fitzgerald – New York (+1 212-351-5262, [email protected])
Please also feel free to contact any of the following leaders and members of the Tax group:
Jeffrey M. Trinklein – Co-Chair, London/New York (+44 (0)20 7071 4224 /+1 212-351-2344), [email protected])
David Sinak – Co-Chair, Dallas (+1 214-698-3107, [email protected])
James Chenoweth – Houston (+1 346-718-6718, [email protected])
Brian W. Kniesly – New York (+1 212-351-2379, [email protected])
Eric B. Sloan – New York (+1 212-351-2340, [email protected])
Edward S. Wei – New York (+1 212-351-3925, [email protected])
Daniel A. Zygielbaum – Washington, D.C. (+1 202-887-3768, [email protected])
Dora Arash – Los Angeles (+1 213-229-7134, [email protected])
Paul S. Issler – Los Angeles (+1 213-229-7763, [email protected])
Lorna Wilson – Los Angeles (+1 213-229-7547, [email protected])
Scott Knutson – Orange County (+1 949-451-3961, [email protected])