This past week, in response to the ongoing COVID-19 pandemic, the IRS and the Pennsylvania Department of Revenue extended the deadline for filing and paying federal income tax. Certain Pennsylvania counties have begun to follow suit. This update summarizes those extensions, but it is important to keep in mind that all details are subject to further revision as the situation continues to develop. Here are the current deadlines for tax filing and payment:
Internal Revenue Service: July 15
Pennsylvania: July 15
Lancaster County: July 15
Lebanon County: April 15
Berks County: April 15
York County: July 15
Adams County: July 15
Dauphin County: April 15
Chester County: April 15
Internal Revenue Service:
On March 18, 2020, the IRS issued a notice to extend the deadline for paying tax until July 15, 2020, but this notice did not address extending the deadline for filing income tax returns. This arrangement—having an April 15 filing deadline and a July 15 payment deadline—was quickly criticized as being both unrealistic and confusing for taxpayers.
On March 20, 2020, the IRS issued a second notice that superseded the March 18 notice. Under the new notice, which is the most current guidance as of the time this update is being written, all federal income tax returns and payments that would normally have been due on April 15, 2020, will be now be due on July 15, 2020. The extension applies to income tax returns required to be filed by individuals, trusts, estates, partnerships, associations, and corporations. The extension applies to all payments of income tax, including tax on self-employment income and estimated tax payments normally due on April 15. Associated interest, additions to tax, and penalties for late payment are also suspended until July 15, 2020, but will begin to accrue on July 16, 2020, for any late returns or payments. No action on the part of the taxpayer is necessary to qualify for the extended deadline. However, it is still possible to file a request to automatically extend the return-filing deadline to October 15, 2020, but this does not extend the deadline for payments beyond July 15, 2020.
On March 21, 2020, the Pennsylvania Department of Revenue announced that the deadline for filing income tax returns and payments would be extended from April 15, 2020, to July 15, 2020, matching the federal filing and payment requirements. Pennsylvania’s law already provides that the time and place for filing tax returns and making payments is linked to the federal deadlines, but this announcement removes ambiguity in the regulations. Many other states have taken similar steps and a summary of state filing and payment extensions is available on various web sites, including www.aicpa.org and www.taxfoundation.org.
As noted above, Lancaster County and several neighboring counties have extended their filing and payment deadlines for the earned income tax to July 15, 2020. Penalties and interest will be waived during the extension period. This is a developing area and other counties are likely to announce in the coming days that they, too, have extended their tax filing and payment deadlines.
Other tax changes in response to the COVID-19 pandemic are on the horizon. A major federal bailout bill is being debated in the Senate, and the House may offer its own bill. Further updates will be provided as developments are confirmed.
This update was prepared by attorney Doug Smith, who practices in the areas of estate planning, estate administration, tax law, and business and non-profit planning. It does not constitute legal advice and has been prepared for informational purposes only. Please contact Doug directly with questions about how these provisions affect you.