Treasury Secretary Steven Mnuchin announced yesterday that the 2019 tax payment deadline of April 15, 2020, will be delayed for 90 days. What does this mean exactly? Individuals and businesses have always been able to request a six-month extension of TIME to file their tax returns. However, if tax is owed, that tax must still be paid by the original due date, which is April 15 for individuals. If tax isn’t paid by April 15, you are subject to penalty and interest from April 15 until it is paid.
The ability to request an extension of TIME to file your tax return is unchanged. What is new is the extension of time to PAY your taxes. For those of you who may owe taxes for 2019, you now have an additional 90 days to pay your tax. Thus, 2019 tax owed as of April 15, can now be paid by July 15. Keep in mind, the tax is still owed and must be paid, but payment can be delayed for 90 days, without penalty or interest. This is certainly good news. However, this announcement only covers 2019 taxes due. Many of you may owe 1st qtr 2020 payments, which are also due April 15, which was not covered in the announcement. I expect this payment deadline will also be extended, but nothing is official yet.
There is also a bill in Congress, passed by the House only, mandating employers to pay sick and family leave to employees affected by the virus and allowing those employers to get a tax credit from the government for the paid leave. This bill is not yet law. The Senate still needs to pass the bill, and from what I have read to date, they are having trouble coming to a consensus on certain provisions. In my experience, it is far too early to discuss any details of what yet may become law as many of the House-passed provisions can be changed by the Senate. We will inform you of actual tax law change as soon as there is a final bill signed by the President.
As always if you have any questions, please call to discuss. We will keep you informed of additional changes as they occur.