U.S. Treasury Secretary Steven Mnuchin announced today that individual taxpayers can defer federal tax payments of up to $1 million for 90 days. The deferment appears to also cover taxes due on income received by individuals from pass-through entities, including S corporations and partnerships. In addition, corporations can defer federal tax payments of up to $10 million for 90 days.
Although the Internal Revenue Service (IRS) is waiving penalties and interest on late payments of tax as described above, taxpayers are still required to file their federal tax returns on time (or apply for an extension of time to file). For most taxpayers, this will mean that returns will need to be filed on or before April 15, unless extended by filing a Form 4868 for individuals, Form 7004 for corporations, partnerships, trusts, and other entities, or Form 8868 for tax-exempt organizations.
It is possible that the federal government may extend the filing deadline across the board, but absent an official announcement to that effect, taxpayers should assume that regular tax filing deadlines are still in place for federal returns. On the other hand, several states (including California, Connecticut, and Maryland), have already announced that they are extending deadlines to file certain state tax returns, and more may follow.
Finally, some reports indicate that the federal government is considering the possibility of delaying the deadline for estimated quarterly tax payments typically made by businesses and self-employed individuals. However, no definitive announcement or guidance to that effect has yet been released.
Schiff’s Coronavirus Task Force will continue to proactively address the significant business, legal, and economic challenges that accompany the COVID-19 pandemic. Stay tuned for additional Insights on ongoing coronavirus COVID-19 pandemic challenges and issues facing businesses, such as these articles on SEC guidance for annual shareholder meetings, the Families First Coronavirus Response Act, and top questions and answers for employers.