Tax time is no longer just April 15th. Recent guidance from the IRS delays the Federal tax filing deadline and Federal tax payment deadline. However, state deadlines and the impact on contributions to a Health Savings Account remain less clear.
What are the details?
- The deadline was extended from April 15, 2020 to July 15, 2020 for the 2019 tax year
- All penalties and interest owed will not accrue during this time
Tax payment deadline delayed
The first tax adjustment news released by the U.S. Department of the Treasury was an extension of the federal tax payment deadline. This provided additional time to individuals or corporations that expect to owe Federal taxes. Additionally, all penalties and interest owed will not accrue during this time.
The deadline was extended from April 15, 2020 to July 15, 2020 for the 2019 tax year. The provision aims to provide relief to Americans in the midst of COVID-19.
Tax filing deadline delayed
Shortly after the Federal payment deadline extension was announced, a second notice indicated the tax filing deadline (previously unaffected) was also extended from April 15 to July 15.
This means that all Federal tax filings, which would have been due by April 15, will now be due on July 15, 2020 for the 2019 tax year.
However, despite the deadline extension, tax payers, corporations, and businesses of all sizes which expect a refund, are urged to submit their taxes in order to receive timely refunds from the IRS. Additionally, this guidance only pertains to Federal Tax Filing.
What about state versus Federal taxes?
What to expect on a state by state level is still evolving. A report from the IRS states that the relief “only applies to federal income tax payments otherwise due April 15, 2020, not state tax payments…”
In many cases, states are expected to follow Federal guidance. But, you will need to check with your state to determine if they are adopting these rules or if the rules they adopt vary from the Federal guidance. The IRS provides a list of each state’s current tax agency, including the tax agency name and website.
Additionally, the American Institute of Certified Public Accountants (AICPA) has created an high level outline detailing what each state is doing in regards to taxes.
Impact on HSA contribution deadlines
Updated 3/24/2020. Notice 2020-18 from the IRS confirmed the 2019 HSA contribution deadline would be July 15, 2020 to align with the updated tax filing deadline.
Why does it matter?
Individuals and families can choose to make a contribution up to the 2019 maximum in order to receive a larger refund. While, this contribution generally needs to be made by the April 15 deadline, individuals will now have until July 15, 2020 to tax advantage of this option for the 2019 tax year.
Review what tax documents to expect when it comes to tax time and your HSA.
You can also access these additional free resources from BRI on filing your taxes:
- IRS Newsroom, Payment Deadline Extended to July 15, 2020, March 20, 2020
- U.S. Department of the Treasury, Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak, March 20, 2020
- CBNC, Tax Day is now July 15. Why you should get your return in even sooner, March 20, 2020