On March 17, Treasury Secretary Steven Mnuchin announced that the government is pushing back the April 15 tax payment deadline to July 15. The payment extension is part of the administration’s efforts to curb the economic impacts of the coronavirus (COVID-19) pandemic, and gives taxpayers and many businesses three more months to pay taxes owed without late payment penalty and interest assessments. It is important to note that this is a payment deferral, not a filing deferral—tax returns or extensions due on April 15 must still be filed by that date.
This move aims to improve cash flow situations that some businesses are currently facing. Individuals can defer up to $1 million of tax liability, while corporations get an extension on up to $10 million. Mnuchin said the delay will free $300 billion of liquidity in the economy, as individuals and businesses have more time to pay their taxes.
The administration is also considering delaying the quarterly estimated tax payments that self-employed workers and businesses pay the IRS throughout the year, according to sources familiar with the issue. The first payment is typically due April 15, as well.
Our team will continue to monitor this situation and keep you informed about any relevant updates that impact your business once additional clarity has been provided. More tax-related news can be found on our service page. For help guiding your business through the coronavirus outbreak, download our COVID-19 Business Continuity Checklist or visit our resources page.