IRS Announces 90-day Payment Extension for Federal Taxes, and FTB Extends State Tax Deadlines

By Nate Miller, CPA, MS

March 19, 2020

U.S. Treasury Secretary Mnuchin announced on Tuesday, March 17, that there will be a 90-day extension for federal income tax payments due to the COVID-19 pandemic. The 90-day extension postpones the payment of taxes from the April 15, 2020 deadline to July 15, 2020. According to the IRS Notice (2020-17) the Applicable Postponed Payment Amount is:

  • Available for C corporations deferring up to $10 million in aggregate (the $10 million limit applies at the consolidated group level if the corporation is part of a consolidated group).
  • Available for all taxpayers other than C corporations deferring up to $1 million in aggregate, regardless of filing status (the $1 million limit applies whether you are filing as a single individual or jointly as married individuals).

Relief only applies to:

  • Estimated federal income tax payments due on April 15, 2020, for the 2020 taxable year, including self-employment taxes. 

This does not eliminate the requirement to file your federal taxes by the April 15, 2020, deadline. The IRS strongly recommends still filing on time if possible, or to submit a filing extension.

Additionally, on March 18, the State of California Franchise Tax Board (FTB) took additional measures and announced updated special state tax relief for all California taxpayers. This relief extends both the filing and payment deadlines to July 15, 2020 for state taxes. The announcement states Californians do not need to claim any special treatment or call FTB to qualify for this relief (extension).

 FTB is postponing filing and payment deadlines to July 15, 2020 for all individuals and business entities for:

  • 2019 tax returns
  • 2019 tax return payments
  • 2020 1st and 2nd quarter estimate payments
  • 2020 LLC taxes and fees
  • 2020 Non-wage withholding payments

Again, the FTB does encourage taxpayers to file in on time to get their refunds in a timely manner.

You can always count on us to keep you updated and informed. Your Grimbleby Coleman team is working diligently to stay on top of the changes coming down the pipeline during this uncertain time. If you have any questions or need any assistance, please don’t hesitate to reach out to your accountant.