Updated rules: 2019 taxes and 2020 estimated tax payments
The IRS issued formal guidance providing relief for taxpayers affected by the COVID-19 pandemic. Pursuant to the guidance, the deadline for income tax filings (Forms 1040, 1041, 1120 and 1120S) and income tax payments due on April 15, 2020, is automatically postponed until July 15, 2020. This includes the 2019 income tax and the 2020 first quarter estimated tax payment. In addition, taxpayers do not have to file Forms 4868 or 7004. Lastly, interest or penalties will not be calculated for the period April 15, 2020, through July 15, 2020.
Please note that the IRS has not granted relief for 2020's second quarter estimated tax payments. Therefore, second quarter 2020 estimated tax payments remain due on June 15, 2020. We are hopeful that the IRS will postpone second quarter 2020 estimated tax payments.
The Illinois Department of Revenue has also provided guidance that automatically extends the deadline for paying and filing 2019 Illinois income taxes from April 15, 2020, to July 15, 2020. It is important to note that Illinois has not extended the deadline for 2020's quarterly estimated tax payments. Therefore, the first quarter estimated tax payment remains due on April 15, 2020, and the second quarter estimated tax payment remains due on June 15, 2020. However, Illinois now states that 2020 estimated tax payments can be calculated based on 100% of the taxpayer’s actual liability for 2018, 2019 or 2020. This allows taxpayers to compute the 2020 quarterly payment as of April 15, 2020, and June 15, 2020, even if the 2019 tax return is not filed until July 15, 2020.
Separately, the IRS has automatically extended the filing and paying deadline for 2019 gift tax returns (Form 709) from April 15, 2020, to July 15, 2020.
Since the tax laws are confusing and inconsistent, it’s best to contact a Chuhak & Tecson attorney to help you navigate through tax transactions or controversies.
This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.
Client alert authored by: David B. Shiner, Principal, J.D., LL.M Taxation