Note: This alert was based on the proposed form which was not ultimately adopted. Please see more recent updates on Tax Issues:
CARES Act: Important Tax Provisions
CARES Payroll and Employment Taxes Alert
The Treasury Department expanded this tax payment relief to: (i) cover all taxpayers who have a tax payment due originally due on April 15, 2020; (ii) eliminated the limitation on the aggregate amount that can be deferred; and (iii) gave an automatic income tax return filing extension to July 15, 2020 for 2019 income tax returns and first quarter 2020 estimated income tax returns that were originally due on April 15, 2020. The following tax payments are now due on July 15, 2020:
This relief does not apply to other taxes, does not apply to informational returns, and does not apply to income taxes and self-employment taxes due on a day other than April 15, 2020. The former $1 Million limitation on deferred individual federal income and self-employment taxes, and former $10 Million limitation on deferred corporate income tax has been superseded. There is now no limit on the aggregate amount of 2019 income tax and 2020 first quarter estimated income tax that was originally due on April 15th that may now be deferred until July 15, 2020.
For example, Jeremy Cohen is married, self-employed and has employees. His wife has no federal tax liabilities independent of filing a joint income tax return with Mr. Cohen. He owes the following federal taxes on April 15, 2020:
Mr. Cohen must pay the following amounts on April 15, 2020
Mr. Cohen and his wife may collectively defer paying the remaining $1,025,000 of federal income, self-employment and withholding taxes that are generally due on April 15, 2020 until July 15, 2020.
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