Retirement contributions and other items impacted by the tax deadline change
Now that the IRS has formally changed the 2020 tax filing deadline from the typical April 15th to July 15th, we want to address other items that are impacted by this change in date.
2019 Balance Dues
All taxpayers (including individuals, trusts, estates, corporation or unincorporated business entity) with an income tax return or payment due on April 15, 2020 will have the due date delayed for filing and payment until July 15, 2020. This relief is not contingent upon any impact from COVID-19 to qualify.
As it stands, April 15th is the only deadline that has been changed. Taxpayers with filing or payment due dates other than April 15th (such as May 15th and June 15th) are not delayed. Additionally, this relief does not apply to taxes other than income taxes. Payroll, excise, estate, and gift taxes must continue to follow original due dates.
Minnesota and a number of other states have followed suit, pushing their deadlines back to July 15, 2020.
2020 Estimated tax payments
Under Notice 2020-18, individual and corporate taxpayers with required 2020 1st quarter estimates due on April 15th have had this payment delayed until July 15th. However, this means that the 2020 2nd quarter estimates remain due on June 15th, 2020.
IRAs and other workplace-based retirement plans
Retirement plans that typically require contributions to be made by the due date of your tax return are included in this new tax deadline. This means contributions to your traditional IRA or ROTH IRA can still be treated as 2019 contributions up until the new July 15, 2020 deadline.
One item that the deadline was not moved for is excess elective deferrals to any workplace-based retirement plan in 2019. In the event that you had excess contributions, these still need to be withdrawn by April 15, 2020 to be able to exclude the distributions from income.
Health Savings Accounts and Archer Medical Savings Accounts
Also included with the new July 15th deadline are contributions made to your HSA or Archer MSA. These contributions can be made any time up until the new deadline.
COVID-19 has created many challenges in recent weeks. At Malloy, Montague, Karnowski, Radosevich & Co., P.A. (MMKR), we strive to guide our clients through these uncertain times. If you are concerned about how these changes will impact your finances, contact our team today to schedule a consultation with one of our accountants.