Updates on Federal Income Taxes and Required Minimum Distributions
In Notice 2020-18, the Treasury Department and the Internal Revenue Service (IRS) announced special Federal income tax return filing and payment relief in response to the ongoing Coronavirus Disease 2019 (COVID-19) emergency. Any person with a Federal income tax return or payment due on April 15, 2020, is eligible for relief under the Notice. They will not need to file or pay until July 15, 2020. This includes any type of taxpayer, such as an individual, a trust, an estate, a corporation, or any type of unincorporated business entity. The return or payment must be due on April 15, 2020 – this relief does not apply to Federal income tax returns and payments due on any other date. This also gives you more time to contribute money to your IRA for 2019, which can be made any time until the due date for filing your return that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020. For more details on IRA contributions, see Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
This applies only to federal income tax filings. State filings and payment deadlines vary by state and may be different than the federal deadlines. More information is available at https://www.taxadmin.org/state-tax-agencies. For more information, please see the IRS Filing and Payment Deadlines Questions and Answers page, and consult your tax professional for any specific tax questions.
Additionally, the CARES Act was signed into law last week and makes some provisions for retirement plans and accounts. Specifically, it waves Required Minimum Distributions (RMDs) for the calendar year 2020 for IRAs, 401(k) plans, section 403(b) plans, and section 457 plans. There are also coronavirus-related distributions permitted without penalty for those who have been, or whose spouse or dependent has been diagnosed with the virus and have experienced certain adverse financial consequences as a result. Plan loans have also been broadened for 180 days beginning on the date of the Act to a maximum of $100,000 instead of $50,000 and an account balance limit of 100% instead of 50%.
As always, please feel free to contact us at 518-867-4000 any time if you have questions or want to discuss what this might mean for you. We are always here for you.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.