90-day deferral for US federal income tax payments

US Tax Alert


In order to relieve the financial burden for small businesses and individuals during the coronavirus disease 2019 (COVID-19) pandemic, the President announced during a press briefing with the coronavirus task force on March 17, 2020, that individuals and many businesses will be granted a deferral deadline for federal tax payments. In response to the President’s declaring a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the Treasury Department swiftly issued Notice 2020-17 which provides relief to those taxpayers that have been adversely affected by COVID-19.

The Internal Revenue Service (IRS) and the Treasury Department have postponed the April 15 tax payment deadline by 90 days (to July 15) for both corporate and non-corporate taxpayers. Corporations can postpone up to $10 million in federal income tax payments. Consolidated groups are subject to the same $10 million limit. All other non-corporate taxpayers can postpone up to $1 million in federal income tax payments. The $1 million limit is the same for a single individual and for married individuals filing a joint return.[1] The administrative relief is limited to federal income tax payments (including payments of tax on self-employment) and federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020.

Those who decide to defer their federal tax payments will be able to do so on a penalty-free and interest-free basis, with penalties and interest beginning to accrue for payments submitted after July 15, 2020. However, penalties and interest will begin to run on April 15 for federal income tax payments in excess of the deferral amounts. If taxpayers are impacted by penalties and interest for federal income tax payments despite the foregoing administrative relief, taxpayers are able to apply for reasonable cause relief under Section 6651 for the failure to pay tax timely.

Notice 2020-17 does not extend the filing date for any tax return or information statement, but Treasury Secretary Steven Mnuchin announced on March 20th that the IRS will be extending the filing dates as well to July 15th as part of a continued effort to alleviate the financial burden stemming from COVID-19. This will give all taxpayers an additional 90 days to file their tax returns or information statements on a penalty-free and interest-free basis.

Deferred filing deadlines for state income tax payments


The Franchise Tax Board (FTB) announced it will postpone its 2019 California tax filing and payment deadline to June 15, 2020 and will also waive interest and any late filing or late payment penalties that would otherwise apply.

The FTB has granted further tax relief by extending the state deadlines for:

  1. Partnerships and LLCs which are taxed as partnerships now have an additional 90 days beyond March 15 to file tax returns and pay any taxes due by June 15, 2020;
  2. Individuals to file their personal income tax returns and pay income tax beyond April 15 for a 60-day extension until June 15, 2020; and
  3. Quarterly estimated tax payments otherwise due on April 15 are also granted a 60-day extension to pay by June 15, 2020.[2]

The June 15 extended deadline may be extended even further if the IRS grants a longer deferral period, which it has done through Notice 2020-17

California has also granted employers statewide the opportunity to request a 60-day extension from the Employment Development Department of California to file their state payroll reports or deposit payroll taxes without penalties or interest.[3]


The Connecticut Department of Revenue Service (Connecticut DRS) has extended the deadline for business returns due on or after March 15, 2020, and before June 1, 2020 by at least 30 days and payments associated with those returns have been extended to the corresponding due date in June. More specifically, Connecticut has granted further tax relief by extending the state filing and payment deadlines for:

  1. Pass-Though Entity Tax Returns: Filing date extended to April 15, 2020; payment deadline extended to June 15, 2020
  2. Unrelated Business Income Tax Returns: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020
  3. Corporation Business Returns: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020[4]

The Connecticut DRS has also advised individuals in the process of preparing their state income tax returns (Form CT-1040), that the Connecticut DRS will adjust due dates for filing and payment of state income taxes to align with any specific, actionable announcement from the IRS regarding due dates for the filing and payment of federal income taxes. 


Governor Ron DeSantis announced that Florida’s Department of Revenue will offer flexibility on the deadlines of taxes due, including corporate income taxes and sales taxes, to help businesses adversely affected by the new coronavirus response efforts.


As of March 11, Maryland has extended business-related tax fillings to June 1.[5] The June 1 extension applies to certain business returns with due dates during March through May 2020, including for businesses filing sales and use tax and withholding tax returns. Businesses that file and pay taxes by the extended due date will receive a waiver of interest and penalties.

In addition, Maryland declared that no interest or penalties will be imposed for state corporate or personal income tax payments if such payments are made by July 15, 2020.


As of March 18, the Massachusetts Department of Revenue announced that it is prepared to follow IRS guidance in offering relief and is expected to conform to the 90-day deferral. In Massachusetts there are instances where taxpayers automatically receive at least six extra months to file their tax returns, as long as they satisfy certain tax payment requirements.[6] Additionally, the Department of Revenue may waive penalties under certain circumstances if a taxpayer pays taxes late and will work with impacted taxpayers to waive such penalties. 


As of March 17, Michigan announced it will waive penalties and interest for sales, use and withholding tax returns and payments for a period of thirty days.[7] Any payment or tax return due on March 20, 2020 may be submitted by April 20, 2020. The waiver is limited to sales, use, and withholding payments and returns due March 20, 2020 and is not available for accelerated sales, use, or withholding filers.

North Carolina

The North Carolina Secretary has elected to waive the following penalties:

  1. the penalty for failure to file a return;
  2. the penalty for failure to pay tax when due; and
  3. the penalties regarding information returns.[8]

The waiver applies to the failure to timely file a return, or pay a tax that is due between March 15, 2020, and March 31, 2020.  To obtain the waiver, the taxpayer must file the return or extension application, or pay the tax by April 15, 2020. This waiver is considered a waiver for special circumstances and will not be treated as a waiver for good compliance (which taxpayers can only be granted once every three years per tax type).


The Oregon Department of Revenue has stated that for personal income taxes, taxpayers may file a federal extension to file with the IRS, and the Oregon Department of Revenue will automatically grant a similar filing extension for the Oregon return.[9]  Penalties may also be waived under certain circumstances if a taxpayer is late in paying its tax obligation due to circumstances beyond the taxpayer’s control as a result of the national state of emergency.

Estimated payment due dates for personal income taxes are not extended, however interest will not be imposed on an underpayment of estimated tax if the department determines that by reason of casualty, disaster, or other unusual circumstances the imposition of interest would be against equity and good conscience. 

With respect to Oregon’s new Corporate Activity Tax, initial quarterly payments are due April 30, 2020. However, the Oregon Department of Revenue understands that the COVID-19 pandemic may impact commercial activity so the department will not assess any underpayment penalties to taxpayers who make a good faith effort to estimate their first quarter payments. 

South Carolina

On March 17, 2020, South Carolina announced tax filing and payment (including estimated payments) relief for taxpayers affected by COVID-19 for any taxes administered by or filed with the South Carolina Department of Revenue (e.g., income tax and sales and use tax).

Relief is provided to taxpayers:

  1. located in South Carolina and have been impacted by COVID-19;
  2. who have businesses in South Carolina with offices in South Carolina;
  3. whose tax records are located in South Carolina; or
  4. whose returns are prepared by taxpayers impacted by COVID-19.[10]

South Carolina will also waive any penalties and interest if payment is remitted by June 1, 2020.


The Washington Department of Revenue has issued relief for business and occupation tax (B&O), real estate excise tax, and certain other taxes administered by the department.

For the deferral of B&O taxes, the Department of Finance and Administrative Services (FAS) will defer  B&O tax collections for eligible business owners (those that have $5 million or less in taxable income), allowing small business owners increased flexibility during a period of financial duress caused by the COVID-19 pandemic.[11]

For excise taxes, the FAS announced that affected businesses who owe Washington taxes may qualify for a 30-day extension to file excise taxes (which must be requested before the due date) and waivers for the late payment penalty.[12]  Extensions will not be granted if requested after the due date.

The Washington Department of Revenue has warned taxpayers that extensions for excise taxes will only be granted to those impacted by the declared state of emergency. Those requesting an extension will be denied if the cause for the extension is a result of lack of funds from the recession, bad economy, poor cash flow, or business slowdown.

Other states

Prior to the release of Notice 2020-17, Arizona, Colorado, Indiana, and Ohio have stated they will seek to conform to any federal filing extension. It is anticipated that these states will provide similar relief and issue guidance granting a 90-day deferral for state income tax payments.

We expect more activity by governments in the areas of tax, filing and payment relief, and we will provide additional updates as more information becomes available. 

For additional information or questions concerning this Client Alert, please contact your DLA relationship partner.

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[1]   Notice 2020-17 is unclear if married individuals filing separately will each qualify for a $1 million limit or be limited to a $500,000 limit.