Breakdown of IRS Deadline Extensions Due to COVID-19

In 2020, the U.S. tax day will be July 15th instead of April 15th. On May 28th, the IRS released the latest in a series of guidance extending various deadlines for taxpayers and tax-exempt organizations. Notice 2020-35 amplifies the previous guidance (Notice 2020-23; Notice 2020-20 and Notice 2020-18) and includes certain extensions applying to employment taxes, employee benefit plans, exempt organizations, IRAs and specified education and health savings accounts.

On the whole, the extensions allow any person with a payment or filing obligation due to be performed on or after April 1, 2020 and before July 15, 2020 to have an automatic postponement of that obligation until July 15, 2020.[1] The postponements are automatic, which means that the person or entity does not have to be sick or quarantined or have any other impact from COVID-19 to qualify for relief and does not have to file a request to be covered by the relief. In addition, penalties and interest will not be applied to the extended filings and payments for the period beginning on April 1, 2020 and ending on July 15, 2020.

The Department of Treasury had initially only postponed payments and not filing requirements. It had also initially only postponed filings due on April 15. Fortunately, they later updated the extensions to include a much wider list of forms and requirements. However, the due date for partnership or S corporation returns due on March 16, 2020 is not postponed. This is because the COVID-19 extensions only apply if the original (or extended) due date is between April 1st and July 14th.

Although the IRS Commissioner recently rejected the notion of another extension past July 15, 2020, taxpayers may still request an additional automatic extension until October 15th, but they must file an extension form and pay any taxes due by July 15th.

The IRS extensions cover many categories of federal filings and requirements. Even if a particular requirement is not listed in this summary, it may still qualify for an extension. This summary only covers federal rules, as each state has its own guidance regarding deadline extensions. Be sure to ask your tax advisor about your particular situation.

General Rules
In addition to the list of forms at the end of this summary, the following related extensions are granted.

• Attachments: All schedules, returns and other forms that are filed as attachments to extended forms are also extended to July 15th.
• Elections: Elections that are made or required to be made on a timely-filed form that has been extended are also extended to July 15th.
• Estimated taxes: Estimated quarterly tax payments due April 1, 2020 through July 14, 2020 are extended to July 15, 2020. Thus, most first and second quarter estimated payments will be due July 15, 2020.
• Returns already extended: Fiscal year taxpayers who already requested extensions and were granted a new due date between April 1, 2020 and July 14, 2020 will also be automatically extended to July 15th.

Noteworthy Extensions
The following non-return related deadline extensions may be particularly noteworthy.

• 83(b) elections: Normally, a Section 83(b) election must be made within 30 days of the transfer of interest. But under new extension guidance, if the election would have been due between April 1, 2020 and July 14. 2020, then the due date is extended to July 15, 2020.
• Transition tax: Transition tax installment payments due April 1, 2020 through July 14, 2020 are also extended to July 15, 2020.
• FATCA: FATCA certifications that were due on July 1, 2020 are extended to December 15, 2020, without the need to file an extension request.
• Opportunity Zones: If the last day in the 180-day period in which a person must re-invest their capital gains into a Qualified Opportunity Fund falls between March 31, 2020 and December 31, 2020, it is extended to December 31, 2020.[2] This deadline was most recently updated on June 4, 2020 with the issuance of Notice 2020-39. The guidance also provides extensions for certain failures by a Qualified Opportunity Fund to meet the 90-percent investment standard, the working capital safe harbor and the 12-month reinvestment period for Qualified Opportunity Funds. In addition, the 30-month substantial improvement period is suspended from April 1, 2020 to December 31, 2020, for purposes of the substantial improvement requirement for property held by a Qualified Opportunity Fund or qualified Opportunity Zone business.
• FBAR: FBAR reports (FinCEN Form 114, Report of Foreign Bank and Financial Accounts) which were originally due on April 15, 2020 are now due on October 15, 2020.[3]
• IRA and HSA contributions: The deadline for making contributions to Individual Retirement Accounts and Health Savings Accounts for the 2019 tax year is now July 15, 2020.[4]
• IRA Reporting: The due date for filing and furnishing the forms to report contribution information on the Form 5498 series is postponed to August 31, 2020.[5]
• Safe harbor for renewable energy projects: The IRS is providing an extra year to the four-year "Continuity Safe Harbor" offered in existing guidance for the production tax credit for renewable energy facilities under Section 45 and the investment tax credit for energy property under Section 48 because some companies are facing supply chain delays related to COVID-19.
• Litigation: The following tax litigation items are also extended if they were originally due between April 1, 2020 and July 14, 2020:
  • Filing a petition with the Tax Court;
  • Appealing a decision by the Tax Court;
  • Filing a claim for credit or refund of any tax;
  • Bringing a suit for a claim for credit or refund of any tax; and
  • Commencing a suit for declaratory judgment pursuant to Section 7428(a)(1) related to status and classification of tax-exempt organizations under Section 501(c)(3). [6]

Employment Taxes and Benefit Plans
Notice 2020-35 implemented the following extensions for employment taxes and benefit plans.

• Employers making interest-free adjustments to correct employment tax reporting errors: Corrections to employment tax reporting originally due between April 1, 2020 and July 14, 2020 are now due July 15, 2020. This includes both the employer and employee portions of FICA (Federal Insurance Contributions Act) taxes, Railroad Retirement Tax Act taxes, income tax withholding, pension withholding and other backup withholding.
• Certified Professional Employer Organizations (CPEOs): There is a temporary waiver of the requirement that CPEOs file certain employment tax returns and their accompanying schedules electronically. Specifically, the forms with the temporary waiver are Form 941, Form 943 and the annual return for agricultural employees.
• Funding waivers and other certifications for some retirement plans: Applications for funding waivers for defined benefit plans and certain actions, including certifications and notifications, for multiemployer plans, are extended to July 15, 2020. These extensions apply to qualified retirement plans, including Section 403(b) plans, governmental Section 457(b) plans, SEP plans under Section 408(k) and SIMPLE IRA plans under Section 408(p).
• Cooperative and Small Employer Charity Pensions (CSEC): Deadlines for certain actions with respect to CSEC plans are extended to July 15, 2020, such as the deadline for making the annual contribution, making required quarterly installments, adopting a funding restoration plan and certifying the funded status.
• Initial remedial amendment period for Section 403(b) plans: The initial remedial amendment period for Section 403(b) plans for tax-exempt and governmental entities is extended to June 30, 2020.
• Employee Plan Compliance Resolution System: With respect to a compliance statement issued under the Voluntary Correction Program for employee plans for tax-exempt and governmental entities, implementation of all corrective actions, including adoption of corrective amendments, required by the compliance statement are extended until July 15, 2020.
• Substitute mortality table: Request for approval of a substitute mortality table in accordance with Section 430(h)(3)(C) is extended until July 15, 2020.
• Certain actions for pre-approved defined benefit plans for tax-exempt and government entities: With respect to pre-approved defined benefit plans, the deadlines for the following actions is postponed until July 31, 2020:
  • Adoption of a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List;
  • Submission of a determination letter application under the second six-year remedial amendment cycle; and
  • Actions that are otherwise required to be performed with respect to disqualifying provisions during the remedial amendment period that would otherwise end on April 30, 2020.

While IRS offices seem to be slowly opening up, many IRS contact numbers are still out of service at this time. IRS guidance originally indicated that most actions that were due to be performed by the IRS from April 6, 2020 through July 30, were postponed for 30 days. Further postponement is likely, but is not published at this time.

General Forms and Payments
Unless otherwise noted, if the due date for one of the following payments or forms was originally between April 1, 2020 and July 14, 2020, the new due date is extended to July 15, 2020.