This extension of the filing deadline to July 15th comes on the heels of a prior extension of the payment deadline until July 15th (formalized in IRS Notice 2020-17 on March 18th).  That prior payment-only extension created a trap for the unwary.  If a taxpayer were to have failed to file an extension, but paid/filed by July 15th, they would have avoided the .5% per month late payment penalty, but would have incurred a much more onerous 5% per month late filing penalty.  Today’s apparent extension of the filing deadline gets rid of that trap; though we’ll need to await written guidance from the Treasury/IRS to be sure of the scope and implications.  

For individual taxpayers, all of this should mean that 2019 tax returns, and any payments due with 2019 tax returns (including self-employment taxes), are extended from April 15th to July 15th.  Further, first quarter extension payments for the tax year 2020 have also been extended from April 15th to July 15th.  The payment extension applies up to certain limits: for C corporations that limit is $10,000,000, and for all others that limit is $1,000,000.

For businesses that maintain their tax year on a calendar year, the filing deadline was on March 15th, so there is limited applicability.  But for businesses that maintain their tax year on a fiscal year basis, such that an income tax return and/or payment that was due on April 15th, the extensions would have applicability. Further, the extensions ostensibly apply only to federal income taxes, and therefore payroll tax deposits must continue to be made by employers.
With regard to extensions at the state level, Pennsylvania has not yet officially declared any filing or payment extension.  New Jersey legislators have passed Senate Bill 2300, which if signed into law by the Governor should generally piggy back on the federal filing and payment extensions to July 15th.  The states don’t have the financial flexibility of the federal government, and we may expect that not all states will provide the extensions offered by the federal government.

We expect to be providing additional information as we get more guidance.