Top #5 things to note about the extended Tax deadline July 15-2020 from April 15-2020 which is just round the corner
Millions and millions of Americans have been affected by the deadly coronavirus whose impact is worsening further day-by-day. Americans are facing health problems, losing their sources of income and are facing a very difficult time. In such bad times, the Federal Government has been quite supportive and has taken up various initiatives by which the economic stress of the Americans would be reduced.
One of the major initiatives taken by the Federal Government to reduce the economic burden on the Americans affected by the pandemic COVID-19 is the extension of the tax return filing and the tax payment deadline to 15th July 2020 by the IRS. This extension in tax filing deadline is applicable for all taxpayers i.e. both residents and non-residents and including individuals, corporations, estates, trusts, and other non-corporate tax filers as well.
Let us know about the major five things about this tax deadline extension provided by the Federal Government.
a.Extension for filing tax return and tax payment
This extension offered by the IRS is applicable both for filing Federal tax return and Federal tax payment. Originally, the Federal Government was about to give the deadline until 15th July 2020 to pay the taxes along with penalties and interest. However, the rules have been modified due to the economic stress caused due to the pandemic COVID-19. But, those taxpayers who are expecting their tax returns must file them soon to obtain the refunds faster.
b.Eligibility for availing the extended deadline
According to the IRS, there are is no such eligibility criteria for a taxpayer to avail the extended deadline. Any person who has a pending Federal Income Tax payment or returns due for 15th April 2020 can avail of the relief of deadline extension. This extended timeline is also applicable for the estimated Federal Tax Income payment 2020. This timeline extension is only applicable for those payments or return filing due on 15th April 2020 and not due on any other date.
c.State tax laws
There are a large number of states who have also extended their timeline for Federal income tax return filing and payment dates to 15th July 2020 as that of the Federal Government. States such as Alabama, Arizona, Kansas, Ohio, South Carolina, District of Columbia, West Virginia, Michigan, New Jersey, Montana, Oklahoma, Minnesota, Kentucky, Wisconsin, Maine, Georgia, Illinois, California, Colorado, and many more have their tax return filing and payment extended up to 15th July 2020.
However, there are some states like Hawaii, Idaho, Iowa, and Virginia which have extended their timelines differently than that of the Federal Government. The timeline in Hawaii has been extended to 20th July, in Idaho has been extended up to 15th June 2020, in Virginia had been extended up to 1st June 2020 and up to 31st July 2020 in Iowa.
d.Inability to pay by 15th July 2020
In case a taxpayer feels that he would not be able to pay his Federal Income tax even by the extended timeline i.e. 15th July 2020, then he would have to file for an automatic extension. The taxpayer must request for the automatic extension of the timeline by 15th July 2020. He can be able to request for the extension automatically by e-filing using Form-4868. Moreover, if business entities or trusts would be interested in filing for an extension, then it can be done electronically through the Form-7004.
e.IRA and HSA
Since the deadline for filing tax returns and tax payment has been extended till 15th July 2020; the taxpayers can make contributions to their IRA and HSA up to 15th July 2020.
However, there are some other items whose deadlines have been extended until 15th July 2020.
- The Estimated Federal Tax payment for the second quarter has also been extended till 15th July 2020 which was 15th June 2020 earlier. So, by this, the taxpayers would have to now submit both the Estimated Federal Tax payments for both the 1st quarter and the 2nd quarter by 15th July 2020.
- The partnership return filings and the corporate return filings have been extended till 15th July 2020.
Hence, the extended timeline for making the Federal tax payment, filing the Federal tax returns, and even payment of State Tax is almost round the corner and taxpayers should be prepared for it from now.