We communicated earlier this week initial updated tax guidelines from the IRS regarding emergency relief for individuals and small business owners.
Well, the IRS has released updated guidance on tax deadlines which supersedes previous guidance:
- The deadline for making IRA, Roth IRA, Health Savings Accounts, and Archer MSA contributions is now July 15.
- The deadline to pay a 10% penalty on a withdrawal taken from a retirement account last year is now July 15
- There is now NO LIMITATION on the amount of payment that may be postponed.
As of now, Q2 estimated tax payments are still due on June 15. This may change.
Who doesn’t qualify for the delay: estate and gift taxes, excise taxes, information returns such as 1099 forms, and payroll taxes. (This is subject to change pending the Senate’s stimulus bill).
On top of newly created tax credits, President Trump’s declaration of a national emergency due to COVID-19 triggered the provisions of Section 139 of the Internal Revenue Code.
Its purpose is for employers to pay employees for reasonable and necessary personal, family, living, or funeral expenses incurred as a result of the COVID-19 pandemic.
These payments will generally be deductible by the employer and will be excluded from the recipient’s income. Significantly, this exclusion applies to regular income taxes, many employment taxes, and the NIIT tax.
One additional note: Many taxpayers who already filed their 2019 return scheduled an automatic withdrawal of the tax payment for April 15. This will not be automatically delayed, but taxpayers can take action to change the payment date. If you need assistance working with the IRS to change your scheduled automatic withdrawal, reach out to us for assistance.
*Guidelines will continue to be adjusted as we continue to combat the spread of COVID-19 globally, in which we can continue to expect amendments. Please routinely check back to Ark Financial’s page for updated information.