Internal Revenue Service and Franchise Tax Board Delay Tax Payments Due April 15, 2020

Any person with a federal income tax payment normally due April 15, 2020 is eligible for the following relief:
  • Deferral of up to $1 million in aggregate for all taxpayers other than C corporations, regardless of filing status (so the $1 million limit applies to joint filers); or
  • Deferral of up to $10 million in aggregate for C corporations (the $10 million limit applies at the consolidated group level if the corporation is part of a consolidated group).

The relief presently applies to:
  • 2019 income tax payments due on April 15, 2020 (including self-employment taxes); and
  • The April 15, 2020, estimated income tax payment due on April 15, 2020, for the 2020 taxable year (including self-employment taxes).

IRS 90-day extension isn't a filing extension

Presently you should note that the 90-day extension for payment of taxes does not apply to the April 15 filing deadline― the due date of tax returns remain the same. (IRS Notice 2020-17) This means that even though the actual tax payment has been deferred until July 15, 2020, most taxpayers must still file a timely extension request to avoid the late-filing penalty .

After requests by the American Institute of CPA’s (AICPA) and others, the Treasury Department is considering extending the tax filing deadline to July 15, 2020. We will contact you if there is any change. 

California grants extension to file and pay

The Franchise Tax Board (FTB) announced today, that it is postponing until July 15 th   the filing an d payment deadlines for all individual and business entities  (FTB had previously postponed the deadline to June 15 th ).

This includes the filing and payment deadlines for all individuals and business entities for:
  • 2019 tax returns
  • 2019 tax return payments
  • 2020 1st and 2nd quarter estimate payments
  • 2020 LLC taxes and fees
  • 2020 Non-wage withholding payments

A time of opportunity?

  • Rebalance your portfolio with marketable securities you believe have more upside, recognizing losses that will be available to offset future gains in a more favorable market;
  • Consider transferring wealth intergenerationally now that IRS required Sec 7520 rates are at historic lows; and
  • Eyeing the conversion of qualified retirement plans to Roth IRA’s if 2020 taxable income will be recognized at advantageous rates.

We’ll keep you posted…

We are actively staying abreast of any new developments and will update our clients and friends as soon as possible.

Mann Gelon Glodney Gumerove Yee LLP | (310) 277-3633