Tuesday, March 17, 2020

Coronavirus Update: 90 Day Extension to Pay Federal Taxes

In a press briefing, Treasury Secretary Steven Mnuchin announced that the April 15 due date for payment of federal income taxes has been pushed back 90 days. Individuals can defer up to $1 million of tax liability, and corporations can defer $10 million, without being subject to interest nor penalties for late filing.

Some observations:

  • This is an extension to pay, not to file. So taxpayers still need to file on time.
  • However, individuals can get an automatic extension to file for six months if they file an extension request, so the lack of an extension by Treasury for filing should not be troublesome.
  • It remains to be seen whether state and local governments will follow suit.

Presumably, written guidance will be forthcoming that may bring more details.

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