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UPDATED: Tax Obligations Delayed Due to COVID-19 UPDATED: Tax Obligations Delayed Due to COVID-19

UPDATED: Tax Obligations Delayed Due to COVID-19

As governments continue to handle the repercussions of COVID-19, taxing authorities at the federal and state level are providing some relief to taxpayers. 
 
On March 18, 2020, the Internal Revenue Service released Notice 2020-17, which provides relief from certain federal income tax obligations. The Notice provides generally that the deadline to make payments has been extended until July 15, 2020 for amounts due for the 2019 tax year and for estimated income tax payments due on April 15 for the 2020 tax year. On March 20, 2020, the Internal Revenue Service revised its guidance and issued Notice 2020-18. Notice 2020-18 continued the two payment extensions, but removed the limitations that were previously imposed on who was eligible for the payment deferral ($1 million liability for individuals and $10 million liability for corporations). Importantly, the Notice also extended the filing deadlines for the 2019 tax year from April 15, 2020 until July 15, 2020. 
 
States are still determining how to proceed, and a consistent response has not been adopted at this point. Many states have followed the federal government's lead and have delayed payment and filing deadlines until July 15. For example, Indiana has adopted this approach. Additionally, some states have indicated they may utilize their ability to waive penalties and interest based on "reasonable cause" from taxpayer delays due to COVID-19 issues. However, these may be on case-by-case basis. Other states have not yet determined what action to take. While these states may end up following the July 15 deadline, taxpayers should be aware that not all states to date have taken this approach. 
 
This is a constantly changing situation, and businesses and individuals must carefully understand their tax filing and payment obligations for each jurisdiction in which they operate. Ice Miller's tax professionals can assistant with any questions you may have. Please contact Mark Richards, Tom Schnellenberger, Matt Ehinger, Josh Schlake or any other member of Ice Miller's Tax Team to discuss these issues.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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