Federal Tax Updates (Last Update: 3/27/20)
In response to coronavirus, the Treasury, IRS and federal government have announced several changes to the tax filing season and coronavirus relief and stimulus packages. Here is everything you need to know.
The federal tax filing deadline has been extended to July 15, 2020. Taxpayers getting a refund are encouraged to file their taxes now to get their money.
Last tax season, close to 72% of taxpayers received a tax refund close to $3,000, which for many taxpayers is their largest paycheck of the year. During times like this, that is much needed money for many households. The IRS expects to continue to process refunds as normal. The IRS typically issues nine out of 10 tax refunds within 21 days or less from acceptance with e-file and direct deposit – the fastest way to get your refund.
- Do I need to file an extension to file past April 15? No, you do not need to take any action. The July 15 extension applies to all taxpayers automatically.
- Will the extension of the tax deadline delay my tax refund? No, the IRS expects to continue to process refunds as normal but encourages all taxpayers to file now.
- Do I have more time to contribute to my IRA? Yes, you now have until July 15, to make a 2019 contribution to your IRA.
- Will the deadline for my state taxes also be extended? A majority of states are conforming to the new July 15 tax deadline. However, some states have different deadlines and guidance. To find out the deadline in your state, click here.
The Coronavirus Stimulus Package
On Friday, March 27, 2020, the President signed the Coronavirus Aid, Relief and Economic Security Act (CARES) — a $2 trillion stimulus package that will provide financial relief to individuals, families and businesses — into law. The 2020 coronavirus stimulus package will deliver relief through a range of measures, including an advanced tax rebate for taxpayers.
Eligible taxpayers will receive stimulus checks of up to $1,200 for individuals, $2,400 for joint taxpayers and an additional $500 for each qualifying child.
COVID-19 stimulus payments will be based on information from your most recent tax filings, either 2019 or 2018, if you have not yet filed this season. However, the amount paid to you now will be reconciled on next year’s tax return based on your current 2020 situation.
The CARES Act also allows the government to leverage the direct deposit information in your tax year 2019 or 2018 tax return to deposit these stimulus funds electronically into your account. So what does all this mean?
The first step you should take right now is to file your 2019 tax return, if you have not already. And, if you are getting a tax refund, choose to receive that refund through direct deposit. This will ensure that the IRS has the most current tax filing and direct deposit information for you, which they will use to determine individual stimulus amounts.
Get the latest information and updates on the 2020 stimulus package and what it means for you — including information on how much stimulus money you are eligible to receive and how long it will take to receive your stimulus check — here.
Relief for Individuals and Businesses with Tax Payments
The extension of the federal tax filing deadline also applies to tax payments. Taxpayers that owe money can defer federal tax payments, interest free and penalty free until July 15. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. Taxpayers can defer tax year 2019 federal tax payments regardless of the amount owed. This deferment also applies to tax year 2020 first and second quarter estimated tax payments previously due on April 15 and June 15.
Deferment of federal tax payments means that if you owe money on your federal taxes, you will get more time to pay what you owe.
- How do I know if I qualify for the extended payment deadline? And do I need to file an extension to get it? According to the Secretary of Treasury, anyone with a Federal Tax Payment related to their 2019 taxes and their tax year 2020 estimated tax payments due 4/15/20 can defer their tax payment, free of penalties and interest for 90 days for purposes of the relief.
- What do I do if I already filed my taxes and scheduled my payment for April 15? If you have already filed and scheduled your payment for April 15, you will need to cancel your payment and reschedule it. If you filed with TurboTax, you will need to contact the U.S. Treasury Financial Agent at 888-353-4537 to make that change. Changes to payments need to be made no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
- Does this extension apply to 2020 quarterly estimated tax payments? First and second quarter 2020 estimated income tax payment deadlines have been extended to July 15, 2020.
- What if I need more time past the July 15 deadline to pay? If you need additional time, beyond July 15, you will need to file an extension. An extension will give you until October 15, 2020 to file your taxes, but you will still need to pay any taxes owed by July 15. Payments after July 15 will be subject to penalties and interest.
Federal Tax Update regarding the Families First Coronavirus Response Act
On Wednesday, March 18, President Trump signed into law legislation to provide additional relief for taxpayers impacted by Coronavirus (COVID-19).
The COVID-19 legislation, called the Families First Coronavirus Response Act or H.R. 6201, includes relief for individuals, self-employed and businesses. Get the latest information on the Families First Coronavirus Response Act and what it means to you here.
We’ve Got You Covered
Taxpayers can be confident that TurboTax is ready to help them file now up until the extended July 15 deadline. If you have any questions along the way, our team of credentialed TurboTax Live CPAs and EAs are available on demand to help you out.
Continue to check back here for the most up to date tax information and changes in response to Coronavirus.
State Tax Updates (Last Update: 4/2/20)
- The FTB is postponing until July 15, 2020 the filing and payment deadlines for all individuals and business entities for:
- 2019 tax returns
- 2019 tax return payments
- 2020 1st and 2nd quarter estimated payments
- 2020 LLC taxes and fees
- 2020 Non-wage withholding payments
For a full list of dates for individuals and businesses go to: FTB