With concerns of COVID-19 upending our daily lives and forcing many business to close their doors during peak season, we scramble to adapt. Filing your 2019 taxes can fall down the priority list or even by the wayside. While Congress is considering extending deadlines, it actually pays to get moving on your return sooner rather than later if you are due a refund. With financial uncertainty and government mandated business closures, it is better to have that money in your pocket now more than ever. Let’s discuss the recent legislation passed regarding tax payments and what it means for individuals, small businesses and corporations.
On Friday, March 13, 2020, President Trump declared a national emergency due to rapid spread of the COVID-19 virus, setting the stage for the U.S. Treasury and IRS to offer administrative tax relief. Some of the solutions being discussed include extending deadlines for tax return filing and tax payments, waiving penalties for late payments and interest, and expediting amended tax return processing. In addition to these potential solutions, the House and Senate are voting on a bill to provide tax cuts for employers offering emergency sick leave. It does not include the payroll tax cut sought by the President, but it does require insurers to cover virus testing, provides enhanced unemployment benefits and increased food aid for children, among other things. The Senate is expected to pass the bill this week, and a Presidential signature after that is all but certain.
On Tuesday, March 17, 2020, the President announced that due to the economic impact of the Coronavirus, individuals and businesses will be allowed to defer their tax payments 90 days beyond the April 15 deadline. This means that individuals and businesses can pay the IRS (if they owe additional income tax) for 2019 as late as July 15, 2020.
On Friday, March 20, 2020, Stephen Mnunchin, U.S. Treasury Secretary, announced that the deadline to file has been extended as well to match the payment deadline. Tax Day is now July 15, 2020.
It is important to remember that all bills must pass both the House of Representatives and the Senate and be signed into law by the President – many things being discussed in the media are only conjecture until this approval process has been followed. Until they are, the current laws stand including the due dates for tax returns and extension requests. We will continue to keep you informed about changes that directly impact you and/or your business. In the meantime if you have any questions, please don’t hesitate to contact us.