It’s that time again, where we summarize all the goings on from the IRS. Here is your end of June tax updates.
Multiple Payments Due July 15
The IRS is reminding taxpayers that tax liabilities from 2019 are due July 15, 2020, as well as estimated tax payments from 2020 typically due April 15 and June 15. These extensions were part of the coronavirus tax relief. Additionally, taxpayers who live and work abroad have had their usual June 15 filing date extended to July 15. Payment options and instructions are available. All coronavirus affected payment and filing deadlines can be found here.
Tax Relief For Southern Storm Victims
The due date for filing tax returns and making estimated payments has been extended to October 15, 2020 for taxpayers and businesses affected by storms last April. These FEMA-designated disaster areas include parts of Mississippi, Tennessee, and South Carolina who experienced storms, flooding, and/or tornadoes. Affected taxpayers will also have until October 15 to make 2019 IRA contributions, and the same deadline also applies to estimated tax payments for the first two quarters of 2020 that were due on July 15, and the third quarter estimated tax payment normally due on September 15. More information can be found on the IRS’ disaster relief page.
Economic Impact Payments Belong To Recipients
Following concerns that people and businesses may be taking advantage of vulnerable populations, the IRS has issued a reminder that economic impact payments belong to the recipients of the payments, and not a nursing home or other organization providing care to the recipients. Also, these payments generally do not count as a resource or income for purposes of determining eligibility for Medicaid and other federal programs. The Social Security Administration has further information on how these payments may be handled.
COVID-19 Tax Relief For Retirement Distributions
The IRS has expanded the definition of “qualified individuals” who may take advantage of CARES Act provisions regarding retirement plan distributions and loans. For instance, a coronavirus-related distribution is not subject to the 10% additional tax that otherwise generally applies to distributions made before an individual reaches age 59 ½. Qualified individuals are those affected by COVID-19, whether due to contracting the virus or its effect on their employment. Notice 2020-50 provides the details.