IRS Postpones April 15th Tax Payment Requirement For 90 Days; Includes 2020 Estimated Payments (Filing Still Required)

Update 3/18/20: Here’s the official IRS guidance on this deferment. The actual date is July 15th, not July 14th.

Many have asked whether this applies to quarterly estimated payments for 2020. The IRS guidance is clear the the deferment applies to that as well (bolding mine):

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and 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. The Applicable Postponed Payment Amounts described in this section III include, in the aggregate, all 3 payments described in the preceding sentence due on April 15, 2020 for such Affected Taxpayers.

No postponement has been granted for Q2 2020 estimated taxes which are due on June 15, 2020. So, technically, your Q2 estimated taxes are due on June 15th whereas your Q1 2020 estimated taxes are due on July 15th. (CNBC)

Original Post:

During a press conference today (watch here, minute 33), the Treasury Secretary announced the option for each of us to defer tax payments for 90 days with no interest and no penalty. That’s 90 days beyond the April 15th deadline, and is valid for individuals and businesses. You can defer up to $1M in tax payments for an individual, and up to $10M for corporations.

The idea is to leave more money in the economy. So you can file your return by April 15th and wait to pay  your bill until July 14th 15th. While not the goal, the new rule also will make it much easier for those who want to do a tax extension; typically, you need to figure out how much you owe and file the extension along with payment, but with this new waiver, you can simply file an extension without having to even calculate what you owe. You’ll have until July 14th 15th to figure it out.

Note: this waiver is valid on federal taxes. For state waivers, consult this list.

 
    Chuck
  • On March 18, 2020, 21:10

View Comments (60)

  • Anyone has idea if we can use Discover card via Paypal to pay tax in Q3 and still get 5% back?

      • Good link. Yeah, any one of the tax payment services that accept Paypal would work for that. But there is a fee so it's not a clean 5% net.

        • Sure, but it is quite appealing to get 3.04% back on a payment that would have to be made anyway and ordinarily gets no (or nearly no) cash back after fees!

          EDIT: Technically, it's 3.138% cash back (as I believe you also get 5% back on the 1.96% fee).

  • now both the Q1 and Q2 estimated tax is extended to 7/15/2020, anyone knows how many times can we make payments from each processor? Are we still limited to 2 for each?

  • Hi, does non-resident alien have the benefit of making the payment before 7/15/2020 without penalty?

  • How will the online payment portals handle Q1 deadlines extending through Q2 window and even into Q3? Will we need to pay Q1 based on the old schedule? Or pay based on the new date but we'll be limited in number of payments per 'quarter'?

  • This will genuinely help me out this year. Last night I opened one of Doc's top savings accounts with a nice signup bonus knowing the interest rates are about to fall through the floor. Keeps my money tied up for a few months though. My unexpected hefty tax liability for 2019 was just deferred 90 days. Perfect timing cause my liquid funds are now a little low.

    • The proper procedure is to just file from 4868 with my personal federal tax return. Then, come July, mail in a check for what I would have paid in April. Sound okay?

      • The IRS believes this DINK made too much money last year and still today throwing pocket change into investments and bonuses. Seems not generous enough on my 2019 estimated payments mind you nor are the legitimant deductions even offered now. I read the site daily for offers and money makers and money savers and know you do too Larry.

  • Perfect timing! Now we can deposit the taxes owed into Ally bank. Keep the money there till 6/30. Get the bonus. Then pay the taxes

  • What if I underpaid my estimated tax year? based on Turbotax, I need to pay extra interest and penalty. would the new rule waive these interest and penalty?

    • The IRS guidance is somewhat vague, but after reading it a few times, I interpret it as they are only waiving the penalty and interest related to failure to pay. Underpayment penalty will still apply. It didn't mention how much the penalty will be if you pay in July, but I will assume the calculation will be equivalent to paying in April.

  • Has anyone seen announcements whether the April 15 IRA contribution deadline is also extended?

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