WASHINGTON – The Internal Revenue Service today reminds taxpayers that they have until the postponed due date of July 15, 2020, to file an extension for their 2019 federal tax return. The extension gives taxpayers until Oct. 15 to file, but taxes owed are due by July 15.

The July 15 due date generally applies to all taxpayers who have an income tax filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Taxpayers and tax professionals should continue to use electronic options. The IRS encourages taxpayers to file electronically. Doing so, whether through e-file or IRS Free File, reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. Free File Fillable Forms means there is a free option for everyone.
 
Here’s how to get an extension of time to file
Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension to Oct. 15 in one of two ways:

• Filing Form 4868 through their tax professional, tax software or using Free File on IRS.gov.
• Submitting an electronic payment with Direct Pay, Electronic Federal Tax Payment System or by debit, credit card or digital wallet options and selecting Form 4868 or extension as the payment type. The automatic extension of time to file will process when taxpayers pay all or part of their taxes, electronically, by the July 15 due date.

Businesses that need additional time to file income tax returns must file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

IRS.gov assistance
Taxpayers may find answers to many of their questions using the Interactive Tax Assistant (ITA), a tax law resource that works using a series of questions and responses. IRS.gov has answers for Frequently Asked Questions. The IRS website has tax information in: Spanish (Español); Chinese (中文); Korean (한국어); Russian (Pусский); Vietnamese (Tyng Việt); and Haitian Creole (Kreyòl ayisyen). Go to IRS.gov/payments for electronic payment options.

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Qualified individuals affected by COVID-19 may be able to withdraw up to $100,000 from their eligible retirement plans, including IRAs, between Jan. 1 and Dec. 30, 2020.

These coronavirus-related distributions aren’t subject to the 10% additional tax that generally applies to distributions made before reaching age 59 and a half, but they are still subject to regular tax. Taxpayers can include coronavirus-related distributions as income on tax returns over a three-year period. They must repay the distribution to a plan or IRA within three years.

Some plans may have relaxed rules on plan loan amounts and repayment terms. The limit on loans made between March 27 and Sept. 22, 2020 is raised to $100,000. Plans may suspend loan repayments due between March 27 and Dec. 31, 2020.

#Qualifications for relief
The law defines a qualifying person as someone who:

• Has tested positive and been diagnosed with COVID-19
• Has a dependent or spouse who has tested positive and been diagnosed with COVID-19
  Experiences financial hardship due to them, their spouse or a member of their household:
  • Being quarantined, furloughed or laid off or having reduced work hours
  • Being unable to work due to lack of childcare
  • Closing or reducing hours of a business that they own or operate
  • Having pay or self-employment income reduced
  • Having a job offer rescinded or start date for a job delayed

Employers can choose whether to implement these coronavirus-related distribution and loan rules.Qualified individuals can claim the tax benefits of coronavirus-related distribution rules even if plan provisions aren’t changed. Administrators can rely on an individual’s certification that they’re a qualified person.

Required minimum distributions
People who already took a required minimum distribution from certain retirement accounts in 2020 can now roll those funds back into a retirement account.

The 60-day rollover period has been extended to Aug. 31, 2020.

Under the relief, taxpayers with required minimum distributions from certain retirement plans can skip them this year. Distributions that can be skipped were due in 2020 from a defined-contribution retirement plan. These include a 401(k) or 403(b) plan, as well as an IRA. Among the people who can skip them are those who would have had to take the first distribution by April 1, 2020. This waiver does not apply to defined-benefit plans.

More information
Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act
Coronavirus-related relief for retirement plans and IRAs questions and answers
Guidance on Waiver of 2020 Required Minimum Distributions

Share this tip on social media — #IRSTaxTip: COVID Tax Tip 2020-85: Major changes to retirement plans due to COVID-19. https://go.usa.gov/xfgge

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