US Tax Payment – April 15, 2020 Deadline Postponed
Please refer to our updated post, COVID-19 IRS update: US tax filing deadline extension.
Please note: This post has been updated as of March 19.
The Treasury Secretary Steven Mnuchin said in a press conference on March 17, 2020 that most Americans can get a three-month extension on this year’s April 15 US tax payment deadline to pay their income taxes for the 2019 tax year. The Treasury and the IRS followed up with an announcement on March 18 setting forth the specific guidelines that will apply, following the details announced in Secretary Mnuchin’s press conference.
The key point is that the tax payment deadline is pushed back by 90 days for both individuals and corporations.
April 15th is typically the due date when US taxpayers have to file their tax returns (before any relevant extensions) and pay any US tax payment due to the IRS to avoid having to pay interest and penalties. Under the new announcement, individuals and small business owners will be allowed to defer up to $1 million in tax payments (corporations can defer up to $10 million) for 90 days. During the three-month deferral period, taxpayers will not be subject to interest and penalties.
The announcement does not provide for the deferral of the applicable filing deadlines. Therefore, taxpayers should continue to file their US tax returns, or request for an extension of time to file, by their normal due date to qualify for this relief.
This announcement does not specifically address US taxpayers residing abroad. US taxpayers residing abroad on April 15, 2020 get an automatic two-month extension of time to file to June 15, 2020. Overseas taxpayers are still generally required to pay their taxes on the 15th of April, so the tax payment deferral should apply to them as well. However, their return filing dates have not been changed by this announcement.
The relief also extends the first estimated tax payments for tax year 2020 that are due on April 15, 2020.
If you are expecting a tax refund, you should continue to file your tax return as soon as possible to get the refund issued to you at the earliest.
This announcement only covers the Federal tax payment deadline. The states’ positions will need to be reviewed individually. Some states have rolled out delays due to coronavirus. For instance, California has pushed its tax filing and payment deadline to June 15 (60-day deferral), waiving interest and penalties during this period. Connecticut, Massachusetts and Ohio have indicated that they will follow the IRS’s relief.
However, it is important that if you expect to file a state tax return, you keep a close look at that state’s guidance.
We will continue to monitor this situation.
If you have any concerns, contact us or your usual USTAXFS tax professional directly.