Relief for American taxpayers amid the COVID-19 outbreak came in two forms on Wednesday, March 18, 2020. First, IRS action to postpone the April 15 income tax payment deadline. Second, Congress enacted the Families First Coronavirus Response Act (H.R. 6201), which provides for a refundable payroll tax credit for small businesses. This is the second COVID-19 funding bill. President Trump signed the bill into law shortly after its passage by the Senate. Both the Notice and the Families First Coronavirus Response Act are summarized below.
Notice 2020-17, Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic
- Individuals can defer tax payments up to $1 million for 90 days (until July 15, 2020). This $1 million limit is also applicable to married individuals.
- The Treasury Department indicated that the $1 million limit is also meant to cover small business and pass-through entities.
- Corporations can defer tax payments up to $10 million for the same period (until July 15, 2020).
- Estimated income tax payments for a taxpayer’s 2020 taxable year are included within these deferrable amounts.
- Does not extend the payment or deposit of any other type of Federal tax
- Does not extend the deadline for filing any tax return or information return
- Interest, penalties, or additions to tax with respect to these postponed income tax payments will be waived during the 90-day period, starting on April 15, 2020.
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