By Alan R. Sasserath, CPA, MS
In light of the COVID-19 outbreak, as well as the recent restrictions and operating hours placed on businesses and social gatherings, the Department of the Treasury announced today that the tax payment deadline of April 15 has been extended by 90 days. Individuals and business filers whose deadline is April 15 now have until July 14 to submit 2019 tax payments without incurring interest or penalties.
The U.S. Treasury has also announced that individuals, and pass-through businesses utilizing the individual code on a business owner’s personal tax return, will be able to defer up to $1 million in tax liability to the IRS for 90 days. Corporations will likewise be allowed to defer up to $10 million in tax liability.
So far, this extension does not affect the April 15 deadline to file tax returns, although requests for extra time can still be submitted. The federal government continues to urge Americans to file their tax returns by the April 15 deadline to receive their tax refunds as soon as possible, which could help with much-needed cash resulting from reduced work hours and a stalled economy. Approximately 70% of Americans receive tax refunds each year.
We anticipate that the states will follow suit and will advise you accordingly. We also anticipate that the 90-day extension would apply to estates and trusts, but we have not been able to confirm that yet.
As for the March 15 deadline that has just passed for partnerships and S-corporations, payments due in connection with those returns, as well as the extension deadlines for those who did not file on March 15, have not changed. As the situation is rapidly evolving, Sasserath & Zoraian will report any updates to our clients as soon as the information becomes clear.
While we are not physically in the office, we remain ready to serve you without interruption. Please contact our office with any questions.
UPDATE: March 18, 2020 – The extension also includes payment of estimated taxes for the first quarter of 2020.