March 26 Federal Tax Posts Summary
Late on March 25, the U.S. Senate passed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) by a vote of 96-0. The bill, which provides $2 trillion in coronavirus (COVID-19) relief, will now move to the U.S. House of Representatives for consideration. The House is expected to vote on the bill on March 27. The proposed law contains a wide variety of relief, including small business loans, expanded unemployment aid, $100 billion for hospitals and health systems, funds for industries hit by the virus and direct cash payments to individuals under a certain income threshold. We’ll provide more information as it becomes available.
You probably know by now that, due to the coronavirus (COVID-19) pandemic, the IRS has announced that taxpayers have until July 15 to file their 2019 federal tax returns (rather than April 15) and to make payments that would otherwise be due on April 15. But to qualify for that relief, do you have to be directly affected by COVID-19? The answer is no. Specifically, the IRS says “you do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief.” You only need to have a tax return or payment due on April 15. Keep in mind, this relief doesn’t apply to federal income tax returns and payments due on any other date. IRS.GOV: Filing and Payment Deadlines Questions and Answers
Does your health insurance plan include a tax-smart health savings account (HSA) or perhaps an Archer Medical Savings Account (MSA)? If so, you may be aware that for prior years, you could continue making tax deductible contributions to your account up to the date you file your return or April 15, whichever is later. Due to the coronavirus (COVID-19) outbreak, the filing and tax paying deadline for 2019 federal tax returns has been moved to July 15. That means you now also have until July 15 to contribute to your HSA or MSA. For more information contact us, or see question 21 on this list of frequently asked questions from the IRS: IRS.GOV: Filing and Payment Deadlines Questions and Answers
Taxpayers who make estimated tax payments are generally expected to make their first quarter (Q1) payments for 2020 by April 15. However, because of the coronavirus (COVID-19) emergency, the filing and tax paying deadline for 2019 tax returns has been extended to July 15, 2020. Along with that, certain other tax tasks that were due on April 15 have also been extended, including the due date for the Q1 2020 estimated tax payment. However, as of this writing, the June 15 due date for the second quarter estimated tax payment has not been extended. Contact us with questions.