The Treasury Department and IRS today released guidance on deferring tax payments, providing some clarity to taxpayers and tax preparers as the fallout from the coronavirus outbreak continues.
The release of the guidance comes a day after Treasury Secretary Steven Mnuchin announced that individuals will be able to defer up to $1 million and corporations will be able to defer up to $10 million for 90 days without penalties and interest.
The guidance specifies that individuals, corporations and the self-employed can defer tax payments due April 15 until July 15. It states that the $1 million limit applies both to single filers and to married couples filing joint returns.
The extension of the payment due date applies to taxpayers' 2019 taxes due on April 15 as well as to federal estimated income tax payments due on that date that pertain to the 2020 tax year, the guidance said.
The guidance also notes that the deadline to actually file tax returns has not been extended and remains April 15. As is the case every year, people can request from six-month extensions to file their returns from the IRS.
Treasury extended the filing deadline in addition to the payment deadline to further ease burdens for taxpayers and to ensure that people can receive the tax-preparation assistance they need. Tax professionals had been encouraging the extensions for several weeks.
Mnuchin said in a statement that the guidance will help to ensure that "hardworking Americans and businesses have additional liquidity for the next several months.”
He also encouraged people to file their returns by April 15 "because many will receive a refund."