Taxpayers now have more time to PAY, but the deadline to FILE has not yet changed.
COVID-19 has disrupted daily life for taxpayers across the country. Whether due to school closures or businesses shutting down, change is the one thing that feels inevitable. In a Tuesday press conference held by President Trump’s coronavirus task force, Treasury Secretary Stephen Mnuchin outlined one more change: the tax payment deadline.
According to Mnuchin, individuals whose tax bill doesn’t exceed $1 million will have an additional 90 days to pay, and corporations can defer up to $10 million. He also assured that these deferred payments will be interest and penalty free. This development comes a week after the House Ways and Means Committee sent a letter to the IRS requesting a recommendation about delaying tax-related deadlines.
An important distinction to note is that the tax return filing deadline has not been changed. Taxpayers are still expected to file by the April 15 deadline. One potential reason for maintaining the current deadline could be that Treasury recognizes the importance of taxpayers receiving refunds—especially in light of many being forced to self-isolate.
“Most Americans will get tax refunds,” Mnuchin said, “and we don’t want you to lose out on those tax refunds, and we want to make sure you get them.” Indeed, the financial health of many taxpayers hinges on receiving a tax refund, so delaying that money while possibly being out of work for several weeks could could pose a significant financial hardship. Further, he recommended filing electronically to get any refunds owed as soon as possible.
All current information related to the impact of COVID-19 on the American tax system can be found on the IRS.gov “Coronavirus Tax Relief” webpage, which includes links to statements for the payment deadline extension, high-deductible plans being allowed to cover COVID-19 costs, and more.
Source: “Coronavirus Briefing”; “Payment Deadline Extended to July 15, 2020“
Ambassador Tax Services, Inc.
