What Taxpayers Should Know Amid the Coronavirus (COVID-19) Pandemic

Most common questions answered.

When to file?
The deadline to file and to pay federal income taxes has been automatically extended to July 15, 2020. There is no action required on behalf of the taxypayer. The IRS is offering tax help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19). Visit the IRS’ coronavirus relief page for more information.

When do I pay?
Pay your taxes by Electronic Funds Withdrawal (EFW). The IRS has an entire webpage dedicated to payment by electronic funds withdrawal.

Find an EA

Need a tax expert?

Enrolled agents (EAs) are America’s tax experts. They are federally-licensed tax practitioners who specialize in tax preparation and have unlimited rights to represent taxpayers before the Internal Revenue Service. If you get a letter from the IRS, are audited, or are the target of a collection action, an enrolled agent can speak directly to the IRS on your behalf.

Find a tax expert today!

People First Initiative

The IRS rolled out additional information on its operations, entitled the People First Initiative. We’ve narrowed down a few points for your consideration:

  • Installment agreements: Payments due between April 1 and July 15 for taxpayers under existing installment agreements are suspended. Taxpayers may enter into new installment agreements.
  • Liens and levies initiated by field revenue officers will generally be suspended and new automated liens and levies are suspended.
  • Earned income tax credit and wage verification reviews have until July 15.
  • Appeals will continue to hear appeals over the telephone or by video conferencing.
  • IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

Coronavirus Aid, Relief, and Economic Security Act

Consider these points on H.R. 748 (CARES Act):

For individuals:

  • AGI-limited “recovery rebates”
  • Delay of the April 15, 2020, filing deadline
  • Delay of estimated tax payments until October 15
  • Waives the 10% early withdrawal penalty tax under IRS §72(t) for any coronavirus-related distribution.

For corporations:

  • Delay of estimated tax payments for corporations
  • Delay of payment of employer payroll taxes
  • Modifications for net operating losses
  • Modification of limitation on losses for taxpayers other than corporations
  • Modification of credit for prior year minimum tax liability of corporations
  • Modification of limitation on business interest
  • Technical amendments regarding qualified improvement property
  • Installments not to prevent credit or refund of overpayments or increase estimated taxes
  • Restoration of limitation on downward attribution of stock ownership in applying constructive ownership rules.

Families First Coronavirus Response Act

The second piece of legislation to address the COVID-19 crisis. Pillsbury Law provides an analysis of H.R. 6201 providing key takeaways. The Joint Committee on Tax also provides a detailed explanation here.

Treasury Department Updates for CARES Act

The Treasury Department sheds additional light on small business elements in the recently enacted CARES Act:

Paycheck Protection Program<: Treasury and SBA expect to have the program up and running by April 3, and expect businesses will be able to go to a participating SBA 7(a) lender, bank, or credit union to apply for a loan with same-day approval. The loans will be forgiven as long as funds are used to keep employees on payroll and for certain other expenses. The program provides capital to businesses without collateral, personal guarantees, or SBA fees. More details here. Further, Treasury also offers a pagewith an overview of the program, as well as information designed for both lenders and borrowers.

Employee Retention Credit (ERC) The ERC is a refundable tax credit, available to all employers, regardless of business size, and covers up to 50 percent of up to $10,000 in wages. The Treasury release answers a number of questions (how the credit is calculated, which wages qualify, etc.), while IRS provides similar information, including instructions on how eligible employers may receive the credit plus the new Form 7200 (Advance Payment of Employer Credits due to COVID-19).

Economic Impact Payment Outreach Resources

Help us to spread the word about economic impact payments.

On April 4, NAEA received a letter from IRS Commissioner Chuck Rettig asking that we help the IRS spread the word about the coordination of economic impact statements. We need your help to reach many lower-income, non-filers, military, veterans, ethnic, and homeless communities who are not in the IRS system and who may not step up to provide information that would enable the IRS to generate payments on their behalf. Please think creatively to spread the word to your local network, starting with your clients, a board on which you sit, a volunteer program, or your church/place of worship.

Additional Guidance on Delayed Federal Income Tax Payments

Notice 2020-17: The IRS and Treasury issued  Notice 2020-17, which provides guidance on delayed federal income tax payments and sets a new payment deadline of July 15, 2020, for certain returns.

Notice 2020-18: IRS released Notice 2020-18 expanding upon the payment deadline relief provided in Notice 2020-17. Here are the notable changes:

  • “Person” includes an individual, a trust, estate, partnership, association, company, or corporation as provided in §7701(a)(1).
  • “Affected taxpayers” need not file Forms 4868 or 7004.
  • There is no limitation on the amount of the payment that may be postponed.

IRS Offers Additional Resources

The IRS has provided additional economic impact tools to help spread the word about COVID-19 relief. The Get My Payment graphic displays the economic impact date and helps with direct deposit. The Non-Filer poster highlights a new tool aimed to help non-filers register for economic impact payments. Please share across your social media channels using the hashtag #COVIDreliefIRS and link to www.irs.gov/getmypayment.