As of March 26, 2020
NEW: ILLINOIS INCOME TAX FILING AND PAYMENT EXTENSION
Illinois taxpayers received welcome relief on March 25 as Illinois largely followed the Internal Revenue Service guidance on the April 15, 2020 tax deadline.
The 2019 income tax filing and payment deadlines for all taxpayers who file and pay their Illinois income taxes on April 15, 2020 are automatically extended until July 15, 2020. This automatic relief applies to all individual returns, trusts, and corporations. These taxpayers will automatically avoid interest and penalties on any taxes due that are paid by July 15, 2020. Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020, same as payments due to the Internal Revenue Service.
Note: This does NOT impact the first and second installments of Illinois estimated payments for 2020 taxes that are due April 15 and June 15. Taxpayers are required to estimate their tax liability for the year and submit quarterly installments as normal.
Further guidance from the IRS regarding the federal tax filing extension:
- No limit on amount subject to relief
Our last update indicated that there would be caps on the amount of taxes due that would be subject to relief from interest and penalties. The cap has since been lifted; therefore, no interest or penalty will accrue on federal income taxes due on April 15, 2020 but not paid until July 15, 2020. This is a welcome relief to larger corporations and high net worth individuals.
- Clarification on which tax forms are eligible for the automatic extension
Not only individuals qualify for the automatic extension. Trusts, estates, and various corporations with an April 15, 2020 due date also receive the automatic filing and payment extension to July 15, 2020.
- Clarification on which tax forms are not extended
The IRS notes that normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes. Additionally, estate and gift taxes do not receive a payment or filing extension.
- Federal estimated tax due dates remain confusing
As we write this today, technically, the 1st quarter 2020 federal estimated tax payment is now due on July 15, 2020. However, there has been no update to the due date for the 2nd quarter federal estimated tax payment, so it remains due on June 15, 2020. Confusing, indeed! We hope to receive clarification and perhaps an extension of the due date of the 2nd quarter estimated tax payment. For now, plan on paying a quarterly estimate on both June 15, 2020 and July 15, 2020 until we receive further guidance.
- Confirmation of due date for Individual Retirement Accounts (IRA) and Health Savings Accounts (HSA) IRA deposits
The IRS has indicated that these deposits are also due on July 15, 2020.
Updates from March 21st, 2020
FEDERAL TAX FILING DEADLINE EXTENDED TO JULY 15
On Friday, March 20, Steve Mnuchin, Secretary of the Treasury, released a statement that the federal tax filing deadline has moved in response to the ongoing coronavirus (COVID-19) pandemic. The new deadline of July 15, 2020 corresponds with the tax payment deadline previously rescheduled earlier in the week. We do not yet have clarity on tax deadlines for certain states, including Illinois. We will keep you posted as guidance is provided.
What this means for you:
Due to the extenuating circumstances surrounding COVID-19, and the Illinois “stay at home” requirement, our office has closed to the public and our employees are working from home. See more about how our operations have been affected below.
We’re here to help:
We understand that this situation can be extremely frustrating. We empathize with what you are feeling as we all navigate this situation together. Please know we are doing all that we can to complete work in an accurate and efficient manner.
If you have any questions regarding the latest update regarding the federal tax filing deadline, or simply want to chat about your current situation, please do not hesitate to contact our office at 630-953-4900.
TAX IMPLICATIONS OF THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT
As the coronavirus event has moved rapidly, markets keep reacting sharply, and people are learning to be adaptable, our elected officials are trying to blunt some of the extreme reactions with the Families First Coronavirus Response Act (H.R. 6201). Click here to read more details about this Act.
Updates from March 19th, 2020
CK OFFICE OPERATIONS
These are certainly trying times and we want to reiterate that Cray Kaiser is here for you. As things continue to evolve in light of the COVID-19 pandemic, we at CK are taking additional precautions for the benefit of our team members and our clients.
- No clients or guests will be allowed in our suite.
- All in-person meetings are cancelled. Instead, we will be utilizing phone calls and/or email to communicate with our clients.
- Our team members are being encouraged to work remotely. All staff are equipped with the appropriate technology and resources to continue to securely and confidentially serve you from home.
Effective at 12PM Friday, March 20th:
- We will no longer have in-person drop offs of accounting/tax data. Instead, please drop off any packages outside the office door of our suite in the box provided.
- All paper files, tax returns etc. will no longer be mailed by our office to you. We will be holding these items in our office to send to you at a later date.
We again encourage you to sign up for our secure portal with which you can safely and securely share tax or other accounting data with our team. Please email email@example.com to receive access and instructions. If you have any questions about the above, please call our office at 630-953-4900.
Updates from March 17th, 2020
TAX PAYMENT RELIEF FOR AFFECTED TAXPAYERS
This afternoon, the IRS issued formal guidance on tax payment relief. Notice 2020-17 establishes the following:
- Every individual or entity with a Federal income tax payment due April 15, 2020 is considered an “Affected Taxpayer” for purposes of relief. Meaning, you don’t need to be physically affected by the virus; if you have a Federal income tax due on April 15, 2020, you qualify for the relief.
- The relief means that all Federal income tax payments due April 15, 2020 have an extended payment due date of July 15, 2020. This includes not only balances due on April 15, 2020 (generally your 2019 tax liability), but also first quarter 2020 federal estimated tax payments due April 15, 2020. The limitation on this relief is capped to $1 million for an individual taxpayer regardless of filing status. Relief is capped at $10 million for corporate taxpayers.
- Interest and penalty accrue above these caps starting on April 15, 2020 (no relief). Meaning, if you are an individual with a 2019 tax liability of $500,000 and a 1st quarter estimate due of $600,000, for a total of $1.1 million, the excess $100,000 tax due is subject to interest and penalty starting on April 15, 2020. Interest and penalty will not begin to accrue until July 16, 2020 for amounts under this cap. No guidance has been provided regarding federal tax payments due between April 15 and July 16, 2020 – namely the 2nd quarter estimated tax liability.
Keep in mind the Notice only deals with payment relief, not filing relief. Based on our understanding of the law, valid extension requests of time to file will be required.
The Notice also does not mention relief of any other federal taxes, including payroll taxes. As such, it’s critical that if cash is tight, you continue to make payroll tax deposits. Failure to do so can be very costly.
Finally, we are still awaiting guidance from a number of state tax authorities including Illinois to determine what filing and/or payment relief might be available. We will continue to keep you abreast of developments as they come.
Updates from March 17th, 2020
TAX PAYMENT DEADLINE DELAYED BY 90 DAYS
There has been much speculation surrounding the impact of the Coronavirus (COVID-19) pandemic on the U.S. tax filing deadline. At a Tuesday White House briefing, Treasury Secretary Steven Mnuchin announced new relief measures that are effective immediately.
The Internal Revenue Services (IRS) has extended the tax payment deadline for 2019 income taxes for individuals who owe up to $1 million and corporations that owe up to $10 million.
Eligible taxpayers can defer payment for up to 90 days without accruing interest or penalties. This puts the new tax payment deadline at July 15. As of now, the tax filing deadline remains April 15, though this could still change. Regardless of a change in deadline, our firm will continue to operate with the goal of completing tax filings without relying on extensions.
We remain on alert to any news about this situation. If the IRS announces a filing extension, we will contact you as soon as possible. It is expected that many states will follow suit in granting similar payment relief. We will be sure to keep you informed of any new updates at both the federal and state levels.
In the meantime, please do not hesitate to contact us with any questions you have regarding these circumstances. We will continue to work diligently to provide the services you count on from our team.
CK PORTAL ACCESS
We want to remind our clients of our portal access and your ability to safely and securely share your information with our team. We ask that you email firstname.lastname@example.org to request your portal access. This will eliminate the need for you to drop off your tax information at our office.
If any changes occur during the course of the next few days, we will update this message on our website and contact you via email as soon as possible with new information.
Thank you for your patience and understanding during this challenging time. We wish you, your family, and your business health and safety. We will continue to support you as best as we can while keeping each other’s health a priority.