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COVID-19: Updated State and Local Tax Due Date Relief Developments Overview In response to the Novel Coronavirus (COVID-19) pandemic, state and local governments are employing various strategies to propose due date relief to businesses and individuals through tax guidance and legislation. This alert discusses due date relief provisions of:

• Internal Revenue Service (IRS) Notice 2020-181; and • Various State and Local Responses.

IRS Notice 2020-18 On March 20, 2020, the Department of the Treasury and the IRS issued Notice 2020-18 to provide relief from tax deadlines to affected taxpayers. An “Affected Taxpayer” is any person (which includes an individual, a trust, estate, partnership, association, company or corporation, as provided in Section 7701(a)(1) of the Internal Revenue Code) with a Federal income tax payment or Federal income tax return due April 15, 2020. For an Affected Taxpayer, the relief provides that:

1. The due date for Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year is automatically postponed to July 15, 2020; and

2. The due date for Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year is automatically postponed to July 15, 2020.2

Federal income tax returns and payments (including payments of tax on self-employment income), as well as Federal estimated income tax payments (including payments of tax on self-employment income), due after April 15, 2020, are not postponed under the Notice.

The IRS also provided frequently asked questions related to the relief provided in the Notice.3 These clarify that the due date postponement to July 15, 2020 for filing and payment also includes taxpayers with a fiscal year end of June 30, 2019, whose returns were otherwise due on October 15, 2019, that have extended until April 15, 2020.

1 Notice 2020-18 is available here. This supersedes IRS Notice 2020-17, issued on March 18, 2020, available here. Notice 2020-18 restates and expands upon the relief provided in Notice 2020-17. 2 As a result of the postponement of the due date for filing Federal income tax returns and making Federal income tax payments from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the Federal income tax returns or to pay the Federal income taxes postponed by Notice 2020-18. Interest, penalties, and additions to tax with respect to such postponed Federal income tax filings and payments will begin to accrue on July 16, 2020. These postponements to July 15, 2020 are automatic, so taxpayers do not need to file extensions by April 15, 2020. 3 The IRS’ Filing and Payment Deadlines Questions and Answers are here.

External Multistate Tax Alert April 6, 2020