AS OF TODAY. . .MNUCHIN ANNOUNCES DELAY IN TAX PAYMENTS
Treasury Secretary Steven Mnuchin announced a three-month reprieve for the payment of taxes normally due April 15th. The deferral of the tax payment is interest and penalty free for 90 days — up to $1 million for an individual and $10 million for a corporation.
Note. This change affects about $300 billion in tax payments, and is meant to improve the health of our virus-sickened economy.
What do you need to do for your client?
Secretary Mnuchin said that "All you have to do is file your taxes. You'll automatically not get charged interest and penalties." You’ll also need to communicate to your clients who have their return in hand that shows taxes due that they do not have to make a payment to the IRS until July 14 (90 days after April 15.) Maybe this will be July 15th when the IRS puts things in writing.
What the announcement doesn’t do.
- The announcement does not change the April 15th due date of the return. Only payment of tax is delayed. Many insiders are still expecting a delay to the Form 1040 filing date— but that hasn’t been announced yet.
- There is no mention of 2020 first quarter estimated tax payments normally due April 15th.
It is logical that the estimated tax payment will be delayed also, BUT Secretary Mnuchin left this April 15th payment out of his statement on delays.
The IRS has established a special section on its website focused on steps to help taxpayers, businesses and others affected by the corona virus. IRS says that this page will be updated as new
information is available. It has not yet been updated for Secretary Mnuchin’s March 17th announcement on the delay of payments.
Warning. Nothing is in writing. This delay is from a press conference. Watch for more information and details from the IRS.
Check your state for similar relief. The California Franchise Tax Board announced on March 13th special tax relief for California taxpayers affected by the corona virus pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments to June 15, 2020, for all tax filings and payments due between March 15, 2020, through June 15, 2020. For other states, see the AICPA chart of state tax filing requirement changes due to the corona virus here.