U.S. Treasury Announces Tax Payment Extension Due to Pandemic
Posted Mar. 22nd 2020
On March 17, 2020, in an attempt to curb the economic effects of the COVID-19 pandemic, Treasury Secretary Steven Mnuchin announced that the U.S. Department of Treasury is pushing back the April 15 deadline for payment of 2019 taxes by 90 days. According to Mnuchin, individuals will be able to defer up to $1 million of tax liability, while corporations will receive an extension on up to $10 million, without incurring interest or penalties.
The 90-day extensions will be granted automatically, and therefore filers will not need to cite a specific reason for utilizing the extension. However, the extension will not buy taxpayers extra time to file their returns – only extra time to pay amounts due to the Internal Revenue Service. Therefore, taxpayers will still need to file their tax returns by April 15 in order to avoid failure-to-file penalties, unless they submit paperwork for an automatic 6-month extension.
It is important to note that this new deadline applies only to federal tax income payments. It will be up to the states to set their own deadlines.
Abbott Nicholson, P.C. will continue to monitor announcements from the Department of Treasury and will post updates as they become available.