Following President Trump’s declaration of a national emergency, Treasury Secretary Steven Mnuchin stated at a press conference on March 17, 2020, that individuals can defer tax payments up to $1 million for 90 days. Corporations can defer up to $10 million of tax payments for 90 days.
The $1 million limit for individuals was established to cover small businesses and pass-through entities, he said.
“We encourage those Americans who can file their taxes to continue to file their taxes [by] April 15,” Mnuchin said, especially encouraging people who will be getting tax refunds to do so. “Just file your taxes,” he said, and “you will automatically not get charged interest and penalties” on payments made within the 90-day deferral period.
Mnuchin’s statement did not extend the tax filing due date. For individuals, the filing date generally is April 15. But they can get an automatic extension to file up until October 15 by, for example, filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
Although there has been no mention by state government agencies, we presume the states will follow the federal government with respect to the extension of the payment deadline.
Many details remain unclear with respect to this relief, and no official written guidance has been released at this time. LLI will continue to monitor any new developments and will disseminate the information to you as soon it becomes available.
Congress failed to pass a COVID-19 stimulus package last night and is scheduled to meet today to come to an agreement. We will keep you informed with the details as soon as the bill is passed.
LLI Advisory Group provides this information as a service to clients and other friends for informational purposes only. It should not be construed or relied on as legal or tax advice.