Tax Monitor

An Update on Taxes During COVID-19 - UPDATED

March 18, 2020

By: Robert G. Tweel

Breaking News: U.S. Treasury Secretary Steven Mnuchin announced on March 20, 2020 that the IRS is moving Tax Day to July 15, 2020 from April 15. Accordingly, taxpayers can now delay filing and paying taxes until July 15.  Taxpayers can also still delay paying first quarter 2020 estimates until July 15. For details click here.

The Treasury announced yesterday, March 17, 2020, invoking the Proclamation Declaring a National Emergency, that individuals can defer tax payments of up to $1 million for 90 days for 2019 tax liabilities. Corporations can defer up to $10 million of tax payments for 90 days for 2019 income tax liabilities. This extension also applies to estimated tax payments due on April 15 for 2020.

The goal of this provision is to assist small taxpayers, mainly closely held businesses by deferring their liability for up to 90 days, which is essentially a 90-day free loan from the Federal Government if the taxpayer has qualifying tax liability.

Important points:

• The due date for avoiding interest and penalties will now be July 15, 2020. Make a note of this date on your calendar if you elect to extend.
• This announcement is from the IRS and does not automatically delay your state tax liability. Check your individual state filings to see if they have also delayed payment dates in connection with this announcement. Some states will adopt the IRS payment deferral for federally declared disasters, but you will need to confirm with your state tax department.