As the coronavirus pandemic yells “Cut!” across the world, the entertainment industry will feel the economic impact, with theaters closing their doors, lower attendance at film festivals, delayed productions, and the like.  Business managers and entertainment businesses, however, may feel some relief as Treasury called in sick and postponed Tax Day for 91 days.  The news first broke via tweet on March 20, 2020, when Treasury Secretary Steven Mnuchin announced on Twitter that Tax Day will be moved from April 15 to July 15.  A few hours later, the IRS fleshed out Mr. Mnuchin’s announcement by publishing Notice 2020-18, which provided more details regarding the taxes covered and the taxpayers affected by the new deadline.  The move is one of several recent measures taken by the federal government as it attempts to relieve the immense economic strain being put on Americans by the COVID-19 pandemic.

This announcement comes just two days after—and supersedes—Notice 2020-17, which postponed until July 15 the payment but not the filing of federal income taxes and imposed limits of $1 million for individuals and $10 million for corporations with respect to such postponement.  Notice 2020-18 restates and expands upon Notice 2020-17 by eliminating the distinction between payment and filing of taxes for purposes of the new deadline and by doing away with any pecuniary limits on the amount of tax that may be postponed.

Any taxpayer that has a federal income tax payment or a federal income tax return due on April 15, 2020, including any individual, trust, estate, partnership, association, company, or corporation, receives an automatic extension until July 15, 2020 for filing federal income tax returns and making federal income tax payments.  Estimated payments for the 2020 taxable year that are due on April 15, 2020 are also postponed.  No interest, penalties, or additions to tax by reason of failing to file a return or making a payment will be accrued during the postponement period.  The new deadline will apply to all affected taxpayers automatically; no additional forms need to be filed by taxpayers wishing to avail themselves of the new deadline.  No extension is provided, however, for the payment or deposit of any other type of federal tax, or for the filing of any federal information return.

While the new deadline prescribed by Notice 2020-18 is applicable only to federal income taxes, a number of states have followed the federal government’s lead.  As of the date this article is being published, 24 states have instituted some form of relief with respect to late filing and/or payment of state taxes.  California is among the most notable examples: the state has matched the federal July 15 deadline for both payment and filing for all individual and business income tax returns, as well as payments of 2020 LLC taxes and fees and 2020 non-wage withholding payments.

With U.S. cases of COVID-19 increasing sharply by the day, it is not unreasonable to assume that the disease’s economic impact will get worse before it gets better.  It remains to be seen whether the federal government will further leverage our tax system in an attempt to provide additional relief as more American lives are disrupted by the pandemic.  We hope that Treasury, and our economy, are back in the office soon.