Update on Extension of Tax Payments and Filings due to COVID-19 Pandemic

By Michael Mills and Elaine Yandrisevits

Taxing jurisdictions continue to assess how to respond to the COVID-19 pandemic, with state and local jurisdictions being challenged by budget limitations.  In the forefront of most people’s minds is the tax deadline for personal income tax returns normally due on April 15th.  The following is an updated overview of the tax payment and filing deadlines applicable to our region:

       Income Tax Filing and Payment Deadlines for Individuals (and Trusts and Estates)

  • Federal – 2019 federal income tax returns for individuals (Form 1040) and estates and trusts (Form 1041) which were originally due by April 15, 2020 are now due by July 15, 2020.  Similarly, payments that would have been due with those returns are due on July 15, 2020 (including self-employment taxes).  If an extension is desired through October 15, 2020, the extension would need to be filed by July 15, 2020.  There are now no dollar limits on the amount of payment that is extended.  [IRS Notices 2020-17 and 2020-18]

  • Pennsylvania – On March 21st, The Pennsylvania Department of Revenue  extended the payment and filing deadline for Pennsylvania personal income tax returns from April 15, 2020 to July 15, 2020. This extension applies to estates and trusts which are subject to the Pennsylvania personal income tax.  Unlike the IRS, the Pennsylvania Department of Revenue has also extended the 2nd quarter estimated tax payment to July 15, 2020.

  • Pennsylvania Local Earned Income Tax – Most counties or tax collection services (e.g., Berkheimer and Keystone) have extended the April 15, 2020 filing and payment deadline to July 15, 2020.

  • Philadelphia School Income Tax – Returns and payments of the Philadelphia School Income Tax, which are due on April 15, 2020, have not yet been extended.

  • New Jersey – On April 1, 2020, Governor Murphy announced that New Jersey would extend the personal income tax returns filing deadlines and payments to July 15, 2020.

    Filing and Payment Deadlines for Businesses

  • Federal – Corporate and partnership income tax returns that may have been due on April 15, 2020 (e.g., fiscal year or short-year filings) are extended to July 15, 2020, as are any payments that would have been due with such returns.  Similarly, corporate estimated tax payments that would have been due on April 15, 2020 are extended to July 15, 2020.  Though initially the IRS capped the amount of payment that could be extended, it has since lifted that cap. [IRS Notice 2020-18]

    While employer payroll tax filing and payment deadlines have not been extended, it should be noted that the provisions of the federal CARES Act and Families First Coronavirus Relief Act have provided special credits, refunds, and deferrals relating to federal payroll taxes and deposits/payments.

  • Pennsylvania – No specific extension of payment or filing deadlines has been issued for business income tax returns or payments, due in part to the fact that 2019 returns and estimated payments were generally due on March 15, 2020, which pre-dated the more significant social distancing measures.  However, the Department of Revenue is waiving penalties and interest on Accelerated Sales Tax (AST) prepayments that were due on March 20, 2020, and waiving the prepayment required for April sales tax payments (and instead having taxpayers remit sales tax collected in March).

  • New Jersey – The due date for New Jersey corporate business tax filings was extended from April 15 to July 15, 2020 by Governor Murphy on April 1, 2020.

  • Philadelphia – The due date for returns and payments for the Business Income and Receipts Tax, and the Net Profits Tax, are extended from April 15, 2020 to July 15, 2020; as are estimated payments.

  • Gift and Generation-Skipping Transfer Tax Returns

  • 2019 Gift and Generation-Skipping Transfer Tax returns (IRS Form 709) are now due on or before July 15, 2020, rather than April 15, 2020.  The same is true with payments that would be due with such returns.  An extension may still be granted through October 15, 2020, and an extension would need to be filed by July 15, 2020.  [IRS Notice 2020-20].

  • Federal Estate Tax Returns and Pennsylvania Inheritance Tax Returns

   -  There has been no guidance regarding a Coronavirus-related extension of Federal Estate Tax Returns (IRS Form 706).  These returns and associated payments are filed within 9 months of a decedent’s date of death (though an extension to file can be sought for an additional 6 months).  Until further guidance is issued, such returns and payments would appear to be due without any extension relief.

  -  Pennsylvania Inheritance Tax Returns (PA Form REV-1500) and associated payments are similarly due within 9 months of a decedent’s date of death (though an estate can also obtain an extension to file for an additional 6 months).  Further, an estate can prepay some or all of the estimated Inheritance Tax within 3 months of the date of death.  These payments and filings are made via the Register of Wills, and the Register of Wills offices are not operating normally (and many have been closed).  Therefore, Pennsylvania Department of Revenue has requested that the Register of Wills offices implement the following procedures when their operations resume:

         - If a taxpayer is filing a return or making a payment and indicates that either was due during the timeframe that offices were closed, the Register of Wills is to place a date received as of March 12, 2020 (the date a judicial emergency was declared in Pennsylvania), on the return and the receipt.

         - In addition, the Department of Revenue is making system modifications to not apply penalties for payments received late, that otherwise would have been timely during office closures.

For more detailed information relating to state and local income tax deadlines across the nation, see the following link:

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