CARES Act Relief Provision Review – Pt 1: What You Need to Know About the CARES Act Relief and How to Take Advantage

It goes without being said that the past few months have been full of turmoil and dismay for the majority of those who started 2020 with a bright, economic outlook. With the exception of a few industries, almost everyone has and continues to be negatively impacted by COVID-19s outbreak across the world. This is not relegated to just economic harm, but includes harm to people’s personal life, relationships and health.

In order to help those most affected, the US government has passed many bills and provisions aiming to provide its citizens with the relief they so badly need. Since this is a tax blog, we will specifically cover the biggest tax relief provisions the US government passed. Keep this in mind as you move forward throughout this article—the government’s policies were aimed at putting dollars back into the pockets of its citizens. With this policy objective in mind, it will help flesh out the reasoning behind these sometimes technical and nuanced changes to the tax law and relief provided.

Since there is a lot to cover in the CARES Act, we will break this CARES Act review into four separate parts. Each part will cover the relief provisions of the CARES Act as separated by the following topics—

  • Part 1: Tax Due Date Relief
  • Part 2: PPP Loan, EIDL Advance, and the Stimulus Check
  • Part 3: Tax Relief for Businesses, Professionals, Investors, and Individuals Alike
  • Part 4: Utilization of Retirement Plan Funds and Extended Contribution Dates

CARES Act Relief Provision Review, Part 1: Tax Due Date Relief

As you all know, COVID-19’s impact his the US the hardest towards the end of February the beginning of March in 2020. This impact coincides with the April 15 tax due date for individuals and corporations alike. Generally, without the impact of COIVD-19, individuals and corporations are required to have filed and paid their taxes due from the 2019 tax year no later than April 15, 2020. Unfortunately, COVID-19 impacted many companies and person’s ability to pay and file their taxes by then.

In order to relieve the burden the April 15 deadline had on people who were impacted the most by COVID-19, the US government provided an automatic extension for the filing and payment of taxes. The date was moved from the traditional April 15 to July 15. This three-month deferral allows those with filing and payment due dates that fall between April 1 and July 15 to file any relevant tax forms and pay and such taxes no later than July 15.

Some specific examples of filing dates that were extended to July 15 includes—

  • Individual income tax payments and return filings on Forms 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS;
  • Corporate income tax payments and return filings on Forms 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, and 1120-SF;
  • Partnership return filings on Forms 1065 and 1066;
  • Estate and trust income tax payments and return filings on Forms 1041, 1041-N and 1041-QFT;
  • Estate and generation-skipping transfer tax payments and return filings on Forms 706, 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D), and 706-GS(D-1);
  • Gift and generation-skipping transfer tax payments and return filings on Form 709 that are due on the date an estate is required to file Form 706 or Form 706-NA;
  • Exempt organization business income tax and other payments and return filings on Form 990-T;
  • Excise tax payments on investment income and return filings on Form 990-PF and excise tax payments and return filings on Form 4720; and
  • Quarterly estimated income tax payments calculated on or submitted with Forms 990-W, 1040-ES, 1040-ES (NR), 1040-ES (PR), 1041-ES, and 1120-W.

In addition to the extension of annual income, estate and gift tax filings and payments, the US government also extended the due date for all “time-sensitive actions” falling within the April 1, 2020 to July 15, 2020  out to July 15, 2020. These “time-sensitive actions” include—

  • Filing a Tax Court petition or a petition for review of a Tax Court decision;
  • Filing a claim, or bringing a suit upon a claim, for credit or refund of any tax; and
  • Qualified opportunity fund investments due to be made during the 180-day period in IRC §1400Z-2(a)(1)(A).

If you have specific questions as to whether your filings and payments have been extended, please schedule a consultation with our office to have your inquiries answered.