Article written by:
Rich Lundy, CPA
Director, Tax & Business Advisory Services
On March 17, 2020, Treasury Secretary Steven Mnuchin announced that the Treasury Department has pushed back the April 15, 2020 tax payment deadline by 90 days. However, in the past 24 hours, there were several unanswered questions related to his announcement, resulting in the publication of Notice 2020-17 this afternoon, March 18, 2020. Delaying payment requirements will give businesses and individuals additional time to meet their IRS obligations, potentially lessening cash-flow issues that many are facing.
Individuals may postpone up to $1 million of income tax and self-employment tax liabilities, and corporations may postpone up to $10 million of income tax liabilities that are otherwise due April 15, 2020, to July 15, 2020. This includes both 2019 balances due and first quarter 2020 estimated tax payments. These postponements will be available to taxpayers on an interest-free and penalty-free basis. At this time, it does not appear that there are specific forms or qualification requirements in place, beyond simply making the postponed payments by July 15, 2020.
Note, however, that there is no extension of the April 15 filing deadline. The filing due date for 2019 individual and corporate income tax returns remains unchanged. As a result, for those taxpayers that are unable to complete their 2019 income tax returns by the deadline, an extension must be filed on or before April 15, 2020.
The payment extension is part of the federal government’s effort to curb the economic effects of the COVID-19 pandemic. Mnuchin said the delay will free $300 billion of liquidity in the economy as individuals and businesses have more time to pay their taxes.
Please contact your GBQ representative should you have questions, or if you’d like to discuss the above information in more detail.