Second Dose of Medicine from Treasury for Coronavirus Relief

March 23, 2020

Treasury Building

On Friday, March 20, 2020, the Department of the Treasury issued Notice 2020-18 (which supersedes Notice 2020-17 issued two days prior), postponing tax filing and payment deadlines for many taxpayers in order to grant some amount of relief to individuals and businesses amid the Coronavirus/COVID-19 crisis. In contrast to Notice 2020-17, Notice 2020-18 not only provides many taxpayers with the ability to defer Federal income tax payments otherwise due by April 15, 2020, but also postpones the April 15 filing deadline for Federal income tax returns. Notice 2020-18 does not, however, postpone or alter the deadline for estimated quarterly payments due June 15, 2020.

Notice Issued in Response to Emergency Determination

Notice 2020-18 was issued in response to the determination of President Trump, on March 13, 2020, that the COVID-19 pandemic is of sufficient severity and magnitude to warrant an emergency determination under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. In the declaration of emergency, the President instructed Secretary Mnuchin to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency.

Applicable Filing and Payment Due Date

The Notice postpones the due date for the filing of Federal income tax returns and the payment of Federal income taxes otherwise due April 15, 2020, by 90 days, moving the date returns must be filed and payment must be made from April 15, 2020, to July 15, 2020. The postponed deadline applies to all Federal income tax returns and payments otherwise due by April 15, including income taxes owed for the 2019 tax year, quarterly estimated income tax payments for the 2020 tax year (specifically those due on April 15), and self-employment taxes.

No Limits Placed on Deferrable Amount

Notice 2020-17, which is now superseded by Notice 2020-18, had imposed certain limits on the amount of taxes that may be deferred. However, because Notice 2020-18 grants an automatic extension of the due date for Federal income tax returns to July 15, 2020, there are now effectively no limits on the amount of taxes that may be deferred.

Calculation of Interest and Penalties

For amounts properly deferrable under the Notice, the period of April 15 through July 15, 2020, will be disregarded for the calculation of interest and penalties on unpaid taxes. For all such unpaid taxes, interest and penalties will begin to accrue as of July 16, 2020.

The Notice specifies that the period of April 15 through July 15, 2020, is only disregarded for purposes of calculating interest and penalties associated with “Federal income taxes postponed by this notice.” Accordingly, any currently overdue unpaid taxes will continue to accrue interest and penalties without suspension.

Filing and Payment Deadline for Information Returns Unchanged

Notice 2020-18 specifically states that no extension of any information return or other Federal tax payment (e.g., gift tax returns and payments) is granted by the Notice. Therefore, taxpayers with information returns or Federal tax payments other than Federal income or self-employment taxes due April 15, 2020, must still file (or request an extension) and pay by that same date.

Only Applicable to Federal Taxes

It is important to remember that Notice 2020-18, which was issued by the U.S. Department of the Treasury, is not binding on state and local taxing authorities and that certain state and local income tax payments and tax returns may continue to be due on April 15, 2020. Taxpayers should confirm with their local governments to ensure that filing and payment deadlines are not missed for state and local tax purposes.

At the time of this publication, the United States Senate has not advanced the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), but we will keep you current on all future legislative tax law developments.

For more information regarding Notice 2020-18, Federal or state income tax return and information return filing deadlines and further available extensions, or Federal or state tax payment deadlines, please contact Tony Frasca (734-214-7614 or, Michael Cumming (248-203-0740 or, Tyler Kemper (734-214-7694 or, or your Dykema relationship attorney.

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