On March 13, 2020, the President issued an emergency declaration in response to the ongoing COVID-19 pandemic instructing the Secretary of Treasury to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency. Initially, the IRS issued a Notice postponing the due date for certain Federal income tax payments from April 15, 2020 until July 15, 2020. The IRS has expanded the list of deadline extensions for federal taxes and tax returns to include gift and generation-skipping transfer (GST) tax returns. An earlier notice had applied only to federal income tax returns and payments (including self-employment tax payments) due April 15, 2020, for 2019 tax years, and to estimated income tax payments due April 15, 2020, for 2020 tax years. With the most recent update, the IRS postpones Gift and GST tax filing deadline to July 15, 2020.
Notice 2020-20 updates earlier guidance to include the gift and GST deadline extensions.
What Are Gift and GST Taxes?
Gift Taxes. The Internal Revenue Code imposes a gift tax on property or cash you give to any one person, but only if the value of the gift exceeds a certain threshold called the annual gift tax exclusion, currently $15,000 per person. You can give away the amount of the exclusion each year without incurring a tax. The giver is responsible for paying this tax, not the recipient.
GST Taxes. The generation-skipping transfer (GST) tax can be incurred when grandparents directly transfer money or property to their grandchildren without first leaving it to their parents. These types of transfers share the same lifetime exemption as the federal estate and gift taxes, and are also subject to an annual exclusion limit of $15,000 per person.
The IRS postpones Gift and GST Tax filing which should provide additional relief to those who otherwise would have had to file by the April 15, 2020 deadline.
Resource: Financial Planning, IRS postpones deadline for gift and GST taxes due to coronavirus, https://www.financial-planning.com/news/irs-offers-relief-on-gift-and-generation-skipping-transfer-taxes-due-to-coronavirus
