The IRS and state governments have announced various COVID-19 tax relief programs due to the coronavirus. We’ll do our best to keep this page updated with the most up to date information.
The IRS’s COVID-19 Tax Relief Announcements
The IRS officially extended the deadline to file and pay your 2019 taxes until July 15, 2020, as announced here. You do not need to file any forms to obtain the additional time to file and pay. It was granted automatically. There is also no limitation on the amount of payment that can be posted. But the extension to file and pay only applies on the federal level — it does not grant any relief for state filing deadlines or payments.
No COVID-19 Tax Relief from New Jersey
New Jersey recently extended the filing and payment date to July 15.
Other IRS Tax Relief for COVID-19
On March 11, 2020, the IRS announced that high-deductible health plans can pay for coronavirus-related testing and treatment. The IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met.
Latest COVID-19 Tax Relief: People First Initiative
The IRS just announced the new People First Initiative to help people facing COVID-19 related tax challenges. These are major updates that will help people and businesses with tax problems obtain temporary relief from the IRS.
“The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes,” said IRS Commissioner Chuck Rettig. He continues, “We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.”
So what are the new changes?
They impact those on installment agreements as well as those who’ve filed an offer in compromise or are facing enforcement action, such as a tax lien or levy.
Relief for Existing Installment Agreements
If you are currently on an IRS installment agreement, payments due between April 1 and July 15 are suspended. You can suspend payments during this period. The IRS will not default any installment agreements during this period. Interest will still continue to accrue on the unpaid balances. There’s no word yet whether the failure to pay penalty will continue to apply as well.
New Installment Agreements
If you want to get on an installment agreement for taxes owed, you can still do that now. It’s actually the best time to get on an installment agreement, as the IRS will accept lower monthly payments if your income has decreased due to COVID-19 or the economic downturn.
Offers In Compromise
The IRS announced several changes to help taxpayers who have submitted offers in compromise. If you’ve filed an offer, the IRS will allow until July 15 to provide any additional information the IRS requested to support your officer. No pending offers will be closed without the IRS first getting your consent to close it.
If you’re making payments on an OIC, you can suspend all payments on accepted offers until July 15. Interest will still continue to accrue. But since you’re settling the debt with an offer anyway, this would only impact you if the offer defaulted.
If you haven’t filed a 2018 return, the IRS will not default your offer. You will need to file the 2018 and 2019 returns by July 15.
The IRS is still accepting new offers in compromise. An offer is designed to resolve old tax liabilities and provide a best start. For a variety of reasons, now is the best time to file your offer in compromise. Contact me to find out more.
Non-Filers
The IRS is urging people who haven’t filed for tax years older than 2019 to do so immediately. If the IRS owes you money, time is running out to claim your refund and get your money back. If you miss the deadline, you’ll lose the chance to get this money in your pocket. Additionally, even if you owe money, now is the best time to file delinquent returns. The IRS is offering more flexible payment arrangements and you may even be able to settle with the IRS for a lesser amount.
Collection Activities
The IRS will not be filing any new liens or issuing any new levies at this time. This goes for collection action taken by their automated computer system, as well as actions handled by specialized collection agents, i.e., revenue officers.
No More Passport Revocations (for now)
The IRS has the ability to suspend your passport if you have a delinquent tax liability. The IRS is suspending new certifications from April 1 to July 15. You can still submit a request for an installment agreement or offer in compromise during this time.
No New Audits, But Existing Audits Will Continue
The IRS “generally” will not start any new audits, unless the IRS feels it’s necessary to protect the government’s interests. I interpret this as there is a statute of limitations issue where an audit needs to be started in order for the IRS to conclude the audit within the applicable time period allowed.
Audits already happening will continue. However, there will be no in-person meetings. The IRS will continue these audits remotely.
COVID-19 Tax Relief FAQ
What Payments Are Subject to the July 15 Extension Date?
The extension of time to pay only applies to your federal income tax payments. Different states, have provided other relief. The federal relief applies to two different types of payment: (1) income tax payments due on April 15, 2020, for the 2019 taxable year, and (2) estimated tax payments due on April 15, 2020. You can learn more about estimated tax payments here.
Do I Have to Be Sick to Obtain COVID-19 Tax Relief?
No, you do not need to be sick or be impacted in any other way for the relief to apply.
What Forms Are Included in the Extension of Time to File?
The filing and payment of the following forms have been extended:
- Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
- Form 1041, 1041-N, 1041-QFT
- Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
- Form 8960
- Form 8991
What Form Do I Need to File to Get More Time to Pay My Federal Taxes?
There’s no form you need to file. The extension of time to file and pay your taxes is granted automatically.
When is the Deadline to File My 2019 Tax Return?
As announced on March 20, 2020, the IRS has extended the time to file your tax return until July 15.
Do I Have More Time to File and Pay My Payroll Taxes?
No, payroll and excise tax deadlines have not been extended.
What if I Need More Time to File My Tax Return?
If you need more time to file your tax return, you can still file an extension. An extension will give you until October 15, 2020, to file your 2019 return. You have until July 15 to file the extension.
Will I Get My Tax Refund on Time?
According to the IRS, there is no delay in issuing refunds. If the IRS owes you money, you should file immediately, preferably electronically, to get a refund as fast as possible.
Is More COVID-19 Tax Relief Coming?
Possibly. There are various bills out there that would provide additional relief. I’ll update this page if any of these bills become law.
Questions About COVID-19 Tax Relief? Contact Us Today
If you have questions about any of the recent IRS changes, call or text me at 201-381-5864 or email me at brad@paladinilaw.com.
