Americans Can Defer for 90 Days
As we continue to face uncertain times, the IRS has made a welcome announcement.
Treasury Secretary Steven Mnuchin has announced that the IRS has decided to extend the filing and payment deadline for 2019 tax returns, allowing taxpayers to defer until July 15 without interest or penalties. Mnuchin indicated this move will put $300 billion into the economy during a time of great economic concern over the consequences of the COVID-19 pandemic.
The payment deferment is subject to certain caps, however. Individuals may defer tax payments of up to $1 million, while corporations may defer up to $10 million. The limits were purposefully selected to benefit small businesses that report income through S corporations, partnerships or other pass-through entities.
Please discuss with your tax preparer how this deferral may impact your personal situation. If you believe you are due a refund, you will want to file your return as soon as possible.
What does this mean for state tax filing deadlines?
State tax officials have been largely silent with regard to the announcement of a federal extension. Those that have commented in recent days seem poised to follow the IRS’ lead, but it remains unclear what precisely this means for state filing.
We will continue to update you on developments as the IRS and state officials clarify their intentions. In the meantime, don’t hesitate to reach out if you need additional information or guidance. We are committed to providing you with the knowledge you need to successfully navigate this unprecedented time in history.