COVID-19 Tax News & FAQ
More extended tax deadlines to cover individuals, trusts, estates corporations and others (IR-2020-66) — Extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.
Overview of extensions granted to July 15, 2020
Type of tax return||
|Individual/married tax return & payments||Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS|
|Trust & estate tax return & payment||Form 1041, 1041-N, 1041-QFT|
|Partnership returns||Form 1066|
|Corporation tax return & payments||Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC,1120-SF|
|United States Estate and Generation-Skipping Transfer Tax Return & payment||Form 706; 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D), 706-GS(D-1)|
|Information Regarding Beneficiaries Acquiring Property from a Decedent ||Form 8971|
|United States Gift and Generation-Skipping Transfer Tax Return and payment||Form 709|
|Exempt Organization Business Income Tax Return & payment||Form 990-T|
|Excise tax payments on investment income & payment||Form 990-PF; Form 4720|
|Quarterly Estimated Income Tax Payments & payments||Form 990-W; Form 1040-ES; 1040-ES (NR), 1040-ES (PR); Form 1041-ES; Form 1120-W|
|Return of Organization Exempt from Income Tax ||Form 990|
|Annual Return/Report of Employee Benefit Plan2||Form 5500|
The IRS has additional
FAQ on filing and payment deadlines.
IRS unveils new People First Initiative (IR-2020-59) — The IRS is postponing certain payments related to installment agreements and offers in compromise and limiting certain enforcement actions. The IRS has also released
installment agreement direct debit FAQ.
FATCA Information Returns — The IRS granted an extension from March 31, 2020, to July 15, 2020, to file Form 8966,
FATCA Report, for Reporting Model 2 Financial Institutions and Participating Foreign Financial Institutions. U.S. persons who have an interest of more than $10,000 in foreign financial accounts at any time during the calendar year must file FinCEN Report 114,
Report of Foreign Bank and Financial Accounts (FBAR). Failure to do so can result in a penalty per form. FBARs are still due April 15, 2020, but a taxpayer who fails to timely file will automatically receive an extension to October 15, 2020.
State Tax Filing Guidance — AICPA chart that is tracking summaries of states filing relief.
FFCRA and payroll tax credits
COVID-19 payroll tax credits available (IR-2020-57) — Small and midsize employers can begin taking advantage of two new refundable payroll tax credits designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing COVID-19-related leave to their employees. This relief to employees and small and midsize businesses is provided under the
Families First Coronavirus Response Act (FFCRA).
Employee Retention Credit available for many businesses (IR-2020-62) — The employee retention credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
CARES Act and economic impact payments
CARES Act Summary — NATP summary of the
Coronavirus Aid, Relief, and Economic Security Act (CARES).
Economic impact payments: What you need to know (IR-2020-61) — Details from the Treasury Department and the IRS on the distribution of the economic impact payments. Includes a note that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an economic impact payment. Instead, payments will be automatically deposited into their bank accounts.
Tool for non-filers to register for payments — The IRS launched a new web tool allowing quick registration for economic impact payments for those who don’t normally file a tax return.
Get My Payment tool — This tool shows where and when the economic impact payment was delivered. An additional feature on Get My Payment allows eligible people a chance to provide their bank account information so they can receive their payment more quickly rather than waiting for a paper check. This feature will be unavailable if the economic impact payment has already been scheduled for delivery.
Other notes regarding payments: The first round of payments have started to be deposited. The economic impact payment will be reconciled on the 2020 tax return in the form of a refundable credit that is not taxable income.
We don't have answers for the following items:
- Will the IRS use the direct deposit information on file at the Social Security Administration to deposit the economic impact payment to Social Security recipients who file a return but have a balance due and didn’t include banking information on their return? (however, you'll be able to see this on the Get My Payment tool)
- Is there a cut-off date to file a 2019 return so the IRS has the most current information for issuing the economic impact payment?
- What happens when a married couple divorces but the entire economic impact payment is deposited into an account the other spouse can no longer access?
- Will the IRS cross-match returns filed by dependents so they are not issued an economic impact payment?
- How will the IRS combat fraud so economic impact payments are not issued to identity thieves?
We also have two videos available on YouTube that discuss various taxpayer case studies relating to the economic impact payments —
part 1 and
part 2. Case studies are also available to
Other IRS guidance and notes
Fax certain Forms 1139 and 1045 — The IRS is implementing the temporary procedures described below for digital transmission of Form 1139 and Form 1045 to claim quick refunds of the credit for prior year minimum tax liability of corporations and NOL deductions.
Guidance under the CARES Act to taxpayers with net operating losses (IR-2020-67) — IRS issued guidance providing tax relief under the CARES Act for taxpayers with net operating losses. Recently the IRS issued tax relief for partnerships filing amended returns.
HDHPs can pay for testing and treatment (IR-2020-54) — High-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).
Coronavirus Tax Relief — The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus.
Tax professionals have asked that when a state orders nonessential businesses to close – are tax offices considered essential or nonessential? This is defined by each state. We recommend closely reading your state’s official stay-at-home order.