Treasury Delays April 15 Payment Deadline
The Treasury Department and the IRS have announced an extension for the payment of federal income taxes. At this time, the April 15 filing deadline remains in effect. Taxpayers can file for a six-month extension to file until Oct. 15. The payment extension gives individual and corporate taxpayers 90 days to remit payments due with their 2019 income tax returns, subject to certain limitations. Once Treasury issues written guidance addressing this extension, additional details or provisions may be included.
This extension applies to both individual taxpayers and corporations with payments due April 15. Included in the relief provisions announced by Treasury:
- Individuals can defer up to $1 million in taxes due.
- Corporations can defer up to $10 million in taxes due.
- Delayed payment of estimated quarterly tax payments paid by self-employed workers and businesses is also being considered. The first quarter estimated tax payment for individuals is normally due April 15.
- It is critical to note that these payment deadlines apply to federal returns; they do not automatically apply to your state filing and payment requirements. (Please see our earlier update for the relief granted to California taxpayers.)
Stimulus Plans in the Works
In addition to payment relief, Congress and the Trump administration are working on various relief packages.
To help mitigate some of the economic impact of the COVID-19 virus, the House of Representatives passed the Families First Coronavirus Response Act (the Act). The Act includes two payroll tax credits to help employers cover wages paid to employees needing time off due to the virus. This legislation has now moved to the Senate. As of now, it is not clear whether the Senate will approve the Act as drafted or modify it (which would require sending it back to the House). We will provide additional details once it passes both chambers.
Furthermore, the White House is proposing an $850 billion stimulus as part of a broader relief package in an effort to maintain liquidity in the economy and assist struggling industries. Treasury Sec. Mnuchin also said the administration is looking for ways to get cash to Americans “quickly.”
Obviously, we are living with very fluid developments in the world, and income taxes and economic stimulus are no exceptions. We will be publishing additional alerts as legislation moves forward. As always, we encourage you to reach out to your Squar Milner tax advisor to see how these developments impact your tax position.