IRS Extends Tax Deadline for 2019 Returns in Response to COVID-19
The IRS is still processing refunds
The Internal Revenue Service has extended the 2019 federal income tax filing deadline three months to July 15, 2020, in response to the global coronavirus pandemic sweeping the U.S.
The extension from April 15 is automatic for all taxpayers, who also have until July 15 to pay any taxes that would have been due on April 15. Payments can be deferred without penalties and interest, no matter how much is owed.
Taxpayers don’t need to call the IRS or file any forms. You should still file as early as you can, however, if you're owed a refund. The IRS says most refunds are being issued within 21 days.
Do You Need to File to Get a Stimulus Payment?
With unprecedented business closures and stay-at-home orders in most U.S. states, joblessness is surging amid an economic collapse triggered by the COVID-19 pandemic. The tax day extension is one of a number of sweeping government relief measures, including expanded unemployment insurance and stimulus checks for most Americans.
If you haven't filed your 2019 tax return, you'll still receive a stimulus check (or economic impact payment) as established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The IRS will use information from your 2018 return to calculate the payment instead. (You can use this online tool to check the status of your payment.)
If you don’t normally file a tax return, the IRS has launched a second online tool for non-filers that allows you to register for a CARES Act payment. You’ll be asked to enter some basic information, including your Social Security number and dependents, and then the IRS will determine if you’re eligible and for how much. Those who receive Social Security and Railroad Retirement benefits are automatically registered and don't need to use the tool.
The Usual Late Payment Penalties
Under normal circumstances, tax payments are due on or about April 15 of every year. Usually, you must pay up by that date if you haven’t had sufficient tax withheld from your paychecks, or if you haven’t sent in enough in the way of quarterly estimated tax payments over the course of the tax year.
The IRS will begin charging you with interest and penalties after that date. The late-payment penalty is normally 0.5% of any portion of tax due but not paid by April 15, then 0.5% a month on any unpaid balance up to 25% total. Interest will accrue as well, and the rate can change quarterly because it’s the federal short-term rate plus 3%.
None of this applies in 2020, however, because no fees or interest will be assessed during this reprieve.
The extension originally applied only to tax payments due on April 15, but the IRS has since said all payments that would have been due between April 1 and July 15, such as estimated tax payments, are now due on July 15 as well.
Filing an Extension on the Extension
The July 15 deadline applies to individuals, pass-through businesses such as S corporations, sole proprietorships, and partnerships, as well as C corporations.
Self-employed taxpayers who would normally have had to make April 15 or June 15 quarterly estimated tax payments for 2020 also have the additional three months to pay.
Under normal circumstances, anyone requesting an extension would still need to make a payment by the normal filing deadline if they estimated owing taxes. This is necessary in order to avoid fees and interest. But this year, because July 15 is the new deadline, you have until July 15 to file for the extension and make payments of any estimated tax due for 2019.
Additional Tax Relief Measures
The IRS also announced the People First Initiative to help taxpayers who are currently dealing with other issues with the agency, particularly collection of past taxes owed. Here are the highlights:
- You can suspend any payments due between April 1 and July 15 on an installment agreement you have with the IRS. Interest will continue to accrue on the balance you owe, but no penalties will be imposed.
- You can suspend payments until July 15 if you've entered into an offer in compromise (OIC) with the IRS. In addition, taxpayers who have applied for an OIC now have until July 15 to submit any documents or information that the IRS might have requested. The agency won't cancel your application before then. And you won't be in default of an OIC if you haven't filed a delinquent 2018 return. That deadline has also been bumped back to July 15.
- Field collection activities such as tax levies and liens are suspended until July 15 ... at least for those who aren't considered "high-income non-filers." Automated liens and levies have been put on hiatus during this time period as well.
- You have until July 15 to verify your income or other factors if you've received a notice from the IRS questioning your claim for the Earned Income Tax Credit.
- In most cases, the IRS won't initiate new audits through July 15. (That doesn't necessarily mean that you won't hear from the IRS at the end of July if you made a mistake on your return.) Existing audits will continue moving along, but without any in-person meetings.
Watch the IRS coronavirus webpage to check for additional relief measures. According to IRS Commissioner Chuck Rettig, "The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others."
The Effect on Tax Refunds
The IRS continues to accept returns and process tax refunds, and it's encouraging people to file as soon as possible if they anticipate a refund. You won’t get your refund if you simply file for an extension.
You can e-file your return and request direct deposit of your refund to your bank account to cut down on mailing time. Or you can submit IRS Form 8888 if you’ve chosen to mail in a paper return, and the agency will direct your refund to up to three different bank accounts. Most tax preparation software will take care of this for you—there's no need to additionally file a Form 8888.
Revised State Deadlines
All 50 U.S. states who assess a personal income tax have also extended the deadline beyond April 15, according to the American Institute of CPAs. Check this list for details, or contact your state’s tax authority to find out where things stand in your area.
IRS. "Tax Day Now July 15: Treasury, IRS Extend Filing Deadline and Federal Tax Payments Regardless of Amount Owed." Accessed April 16, 2020.
Internal Revenue Service. "IRS Extends More Tax Deadlines to Cover Individuals, Trusts, Estates Corporations and Others." Accessed April 16, 2020.
Internal Revenue Service. "Treasury, IRS Launch New Tool to Help Non-Filers Register for Economic Impact Payments." Accessed April 16, 2020.
IRS. “Common Penalties for Individuals.” Accessed April 16, 2020.
IRS. “Topic No. 653 IRS Notices and Bills, Penalties, and Interest Charges.” Accessed April 16, 2020.
Tax Policy Center. “What Are Pass-Through Businesses?” Accessed April 16, 2020.
IRS. “Extension of Time to File Your Tax Return.” Accessed April 16, 2020.
Internal Revenue Service. "Filing and Payment Deadlines Questions and Answers." Accessed April 16, 2020.
IRS. "IRS Unveils New People First Initiative; COVID-19 Effort Temporarily Adjusts, Suspends Key Compliance Program." Accessed April 16, 2020.
IRS. “Get Your Refund Faster: Tell the IRS to Direct Deposit Your Refund to One, Two, or Three Accounts.” Accessed April 16, 2020.