I am confused by this years late payment penalties. I have a client who extended before July 15, did file and pay on Aug 20, but has a late payment penalty for time from July 15 until payment. Have they made the late payment penalty more strict this year because of the later filing date of July 15? Or have the rules for late payment (not filing) been the same?
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This means they paid Late: "did file and pay on Aug 20" "who extended before July 15"
You still need to pay what you owe, when filing for the extension.
"Have they made the late payment penalty more strict this year"
This has not changed. If it is due April 15, and you file for extension, you still are supposed to Pay with that submission for an extension.
The code and regs for late payment penalty have not changed. However, the period from the original due date of April 15 to July 15 is "disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by" Notice 2020-17.
Extensions for filing a return do not offer reprieve for late payment penalty. Nevertheless, your client would not be subject to late payment penalty if at least 90% of the tax was paid by April 15 (or July 15 under Notice 2020-17) and the balance due was paid with the return when filed.