The Treasury announced today that individuals and businesses will be allowed to defer their 2019 tax payments for up to 90 days in light of the disruption and losses caused by the Coronavirus outbreak. This moves the due date for payments from April 15 to July 15. An extension will still need to be filed although no payment is required on April 15. As with federal relief, some states, including California and Maryland, have also begun to provide for filing and/or payment delays.
Individuals are allowed to defer up to $1 million in tax payments to the IRS. Corporations will be able to defer up to $10 million in tax payments. All deferrals will be interest-free and penalty-free. We assume that trusts may receive the same treatment as individuals, but more clarity needs to be given by the Treasury Secretary.
The Treasury Secretary encouraged individuals who can still file by April 15 to do so, especially if they are due a refund that could supply needed cash.
This announcement comes on the heels of bipartisan calls from lawmakers and the President to do more to ease the financial burden for individuals and small businesses during the Coronavirus health crisis.
The administration is also considering delaying the first quarter’s payment of 2020 estimated tax that self-employed workers and businesses pay the IRS throughout the year, according to two people familiar with the matter. The first payment is typically due April 15, 2020.
The response by taxing authorities to the impact of Coronavirus continues to develop. We will keep you informed on tax developments as additional information becomes available.
We are here for any questions or discussion you may need to have. We are honored to be your partner and to be of service during these challenging times.
