Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak
Washington – Following President Donald J. Trump’s emergency declaration pursuant to the Stafford Act, the U.S. Treasury Department and Internal Revenue Service (IRS) today issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allows corporate taxpayers a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest. This guidance does not change the April 15 filing deadline.
“Americans should file their tax returns by April 15 because many will receive a refund. Those filing will be able to take advantage of their refunds sooner,” said Treasury Secretary Steven T. Mnuchin. “This deferment allows those who owe a payment to the IRS to defer the payment until July 15 without interest or penalties. Treasury and IRS are ensuring that hardworking Americans and businesses have additional liquidity for the next several months.”
Copied and pasted from the IRS website.
Payments have a new due date but returns – or an extension – are still due on April 15th. The IRS has not clarified what happens to Failure to File Penalties and other penalties and interest that would normally apply if neither a return or extension is filed. It also does not appear to alter any penalties or interests on payments that should have been made prior to April 15th. If you were required to make estimated payments, they would have been due by January 15th so if you have a balance due on your return there may well still be interest and penalties. Perhaps the IRS will issue additional clarification.
