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Wednesday, March 18, 2020

Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak 

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The tax payment deadline has been extended to July 15 for many taxpayers, but it's important to note that the filing deadline for tax returns remains April 15, 2020. If you are unable to file a return by April 15th, you must still file an extension of time time file. At this time, no announcement has been made as to whether MT Dept of Revenue will follow suit, so state payments remain due by April 15th. 

This federal payment relief includes:
  • Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. The IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
  • For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.
  •  This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15. 

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.