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If your business has hit trouble because of the pandemic and you need guidance, the attorneys at G & G Law have assembled a toolkit of accessible, easy-to-digest information that answers many common questions we’ve received from our clients. You can read more about it and purchase it here.

 

This is a guest post from our good friend Jennifer Brugh of JRB Law, LLC, an experienced tax attorney right down the street. Check her out!

www.jrblawoffice.com / P: (773) 231-7488 / F: (773) 273-8613

Both the IRS and the state of Illinois are coming out with new information on a daily basis in the current Covid-19 hit economy.

 

IRS

IRS has extended payment deadlines. Per Notice 2020-17:

Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

 

Please Note: This does not change the filing deadlines for 2019 returns. Individuals who do not expect to be able to file their returns by the regular deadlines still need to apply for an extension. IRS Form 4868 available at https://www.irs.gov/pub/irs-pdf/f4868.pdf should be used to file an individual extension request and IRS form 7004 available at https://www.irs.gov/pub/irs-pdf/f7004.pdf should be used to file an extension request for most business taxes.

Addendum: On March 19th, the IRS announced it will also extend the filing deadline to July 15, 2020 for 2019 income tax returns.

 

Illinois

The State of Illinois is also offering some relief.

Per notice FY 2020-23: Eating and drinking establishments that incur a total Sales Tax liability of less than $75,000 for calendar year 2019 will be granted relief from penalties and interest normally imposed for late sales tax payments. Again, this does not change the filing due dates. However, tax payments that would normally be due in March, April and May are being allowed to be paid in 4 installments due in May, June, July and August for 2020. For all taxes due starting with the May reporting period, the standard deadlines apply through the end of 2020 currently.

 

Public Act 101-0001 also details the Minimum Wage Credit that may be used against Illinois withholding taxes beginning with January 2020 for employers with 50 or fewer full-time equivalent employees.

 

The state has not yet published any relief regarding Corporate or Individual Income Taxes, but individuals are automatically granted an extension for the state filing deadline if they request an IRS extension. This does not extend the time to pay. Individuals who believe they will owe should use form IL-505-I available at https://www2.illinois.gov/rev/forms/incometax/Documents/currentyear/individual/il-505-i.pdf to pay any taxes owed.

Addendum: On March 25th, the Illinois Department of Revenue announced that it will be extending its filing deadline to July 15, 2020 for the 2019 tax return filing to match the IRS. This applies to individuals, estates and trusts and corporations.

 

Corporations also receive an automatic extension. However, like individuals, it does not extend the payment due date. Corporations should use form IL-1120-V available at https://www2.illinois.gov/rev/forms/incometax/Documents/currentyear/business/corporate/il-1120-v.pdf to pay any tax liability they expect to owe.

Addendum: On March 25th, the Illinois Department of Revenue announced that it will be extending its filing deadline to July 15, 2020 for the 2019 tax return filing to match the IRS. This applies to individuals, estates and trusts and corporations.

 

If businesses are struggling, they often miss or ignore tax deadlines, even remembering to file proper extension requests. I would encourage all individuals or small businesses that are struggling in this current economic situation to talk to a tax advisor and be aware of upcoming deadlines.