Washington defers tax payments until July
The U.S. federal government has deferred all tax payments for 90 days, until July 15.
AP’s Martin Crutsinger had the news:
The Trump administration says individuals and businesses will be allowed to delay paying their 2019 tax bills for 90 days past the usual April 15 deadline. The extension announced Tuesday is an effort to inject up to $300 billion into the economy at a time when the coronavirus appears on the verge of causing a recession.
Treasury Secretary Steven Mnuchin said individuals will be able to delay paying up to $1 million in payments. Corporations will be able to defer payment on up to $10 million.
Taxpayers will still have to file their tax returns by the April 15 deadline. But they won’t have to pay their tax bill for 90 additional days. During that time, individuals and corporations will not be subject to interest or penalty payments.
“All you have to do is file your taxes,” Mnuchin said.
The Treasury secretary said President Donald Trump had approved the final details of the program, including its expansion to include the potential of allowing taxpayers to keep $300 billion in the economy for now. Last week, Mnuchin had estimated that deferred payments would amount to $200 billion.
CNN’s Katie Lobosco reported:
Individuals and businesses will have an extra 90 days to pay the IRS if they owe additional income tax for 2019, Treasury Secretary Steven Mnuchin said Tuesday.
Normally, taxpayers owe the amount due by April 15. But as part of the government’s response to the coronavirus, individual and small business filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million — without incurring interest or penalties.
But taxpayers should still file their federal returns by April 15, Mnuchin said.
“We encourage those Americans who can file their taxes, to continue to file their taxes on April 15 because for many Americans you will get tax refunds. We don’t want you to lose out on those tax refunds,” Mnuchin said.
Taxpayers can still request a six-month extension to file returns, like they could in any other year.
The new deadline announced Tuesday applies to federal tax income payments only. It’s up to states to set their own deadlines.
Some states are making changes due to the coronavirus. In California, individuals will have until June 15 to both file and pay their state taxes.
Roger Russell noted for Accounting Today:
Mnuchin made a point of saying that taxpayers could still file for extension, which would allow them to defer filing and payment until October 15.
“We’re not taking that right away,” he said.
No specific mention was made of changing the filing deadline.
“This is disappointing,” said Neil Fishman, president of the National Conference of CPA Practitioners. “From everything that was coming out, we expected they were going to grant a filing extension. But they’re not granting a filing extension – they’re granting a payment extension.”
“This is not helping people with their tax returns,” he continued. “I’ve got clients in a senior facility, and they’re all on lockdown — I was going to go see them this week, but they’re not letting anybody in, not even family. If the person is quarantined, they can’t sign an authorization form. If they owe money, they can’t sign a check.”
The promise to waive “all penalties and interest” raised some questions for some tax experts.