While the particular details have not yet been finalized, the Treasury announced that the payment requirement for those who file by the April 15 tax filing deadline will be pushed back, giving certain individuals and many businesses 90 extra days to pay the taxes they owe.
Taxpayers who file a return or extension by April 15 will receive an interest and penalty-free deferral of time to remit balances due. Individual filers can defer up to $1 million of tax liability and corporate filers get an extension on up to $10 million of tax liability, provided they file. (Note: The tax liability filers can defer will be calculated based on the combined balance of any liability accrued during 2019 and the estimated liability for the first quarter of 2020).
The payment extension to July 15, which affects millions of taxpayers, is part of the Administration’s effort to mitigate some of the economic effects of the coronavirus pandemic.
Delaying payment requirements will give businesses and individuals three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.
The Administration is also considering delaying the estimated quarterly tax payments that self-employed workers and businesses pay the IRS throughout the year, according to two people familiar with the matter. The first payment is typically due April 15.
Qualifying for these benefits is predicated on filing and we will update you as additional guidance is issued with regard to extended returns. Please contact us with any questions.
Contact CBM Tax Practice Director Richard Morris using our online contact form for more information.