The Trump administration today announced an extension to the April 15 tax payment deadline for all individual and corporatetaxpayers. There is some uncertainty whether the extension only applies to individuals with tax liabilities of $1million or less, and corporations with tax liabilities of $10 million or less or if the extension applies to the first $1 million and $10 million of taxes owed, respectively. Theunprecedented move comes pursuant to the President’s nationalemergency declaration on March 13 related to the novel coronavirus outbreak(the COVID-19 virus). The tax relief postpones the tax payment deadlines untilJuly 15, 2020; however, taxpayers apparently must continue to file returns orrequest extensions by the April 15 tax filing deadline.
The tax payment relief applies automatically. As Treasury Secretary Steven Mnuchin explained during the announcement, “All you have to do is file your taxes, [and] you’ll automatically not get charged interest and penalties.” As a result, individuals and corporations will have until July 15, 2020, to pay taxes (up to the specified limits) that were originally due during this period, generally without penalty. However, individual and corporate taxpayers “should continue to file their taxes by April 15 as normal,” according to an interpretation posted on a House of Representatives Republicans’ Ways and Means Committee blogsite. Therefore, in order to obtain the tax payment extension, it appears that individual and corporate taxpayers must file their tax returns or request extensions by April 15.
Additional information is expected from the Internal Revenue Service that may clarify these initial details. For instance, the liability for quarterly estimated income tax payments due on April 15 and June 15 was not specifically mentioned in today’s announcement. The Internal Revenue Service established a dedicated webpage to provide information for COVID-19 tax relief; hopefully, clarification of the new rules will be posted soon.
Should you have any questions concerning these tax filing and payment relief measures, please do not hesitate to contact us.
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