In a shockingly short period of time, the world has changed for the worse. We are all affected. We are all scared. We are all preparing for a big financial hit. No one knows how or when this will end. The good news is that the US government is finally taking this seriously and is moving fast on many fronts. We are going to look at the most recent Covid-19 related information as it relates to your IRS taxes.
The United States is now operating under an emergency declaration pursuant to the Stafford Act. The IRS and the U.S. Treasury Department issued the following guidance on March 18th, allowing all individual and other non-corporate tax filers to defer up to $1-million of federal income tax payments due on April 15, 2020, until July 15, 2020, without penalties or interest. This includes self-employment tax and also allows corporate taxpayers a similar deferment of up to $10 million normally due on April 15, 2020, until July 15, 2020, without penalties or interest. UPDATE, March 20: The April 15 filing deadline has changed to July 15, 2020
“Americans should file their tax returns by April 15 because many will receive a refund. Those filing will be able to take advantage of their refunds sooner,” said Treasury Secretary Steven T. Mnuchin. “This deferment allows those who owe a payment to the IRS to defer the payment until July 15 without interest or penalties. Treasury and IRS are ensuring that hardworking Americans and businesses have additional liquidity for the next several months.”
This change in the tax-payments will keep some much-needed money in the pockets of many people when it is needed most: when our incomes either slow or stop due to the far-reaching effects of the Coronavirus epidemic. Expect more changes from the IRS, as the situation is changing fast.