Treasury Announces Extension of Time to Pay Taxes Owed
The Treasury Department has announced their plan to extend April 15 tax deadline to pay taxes owed for individuals and many businesses by 90 days. Official details have not been released, however based on the announcement it seems many taxpayers will benefit from the extension. We expect more information to be provided shortly, but below are some key points from the announcement as well as a few points of uncertainty.
What was announced?
- Treasury Secretary Steven Mnuchin announced his department is pushing back the April 15 deadline to pay taxes owed by 90 days.
- Individuals can defer up to $1,000,000 of tax liability, therefore if you owe less than $1,000,000 you can wait to pay your tax bill until July 15th.
- Corporations can defer up to $10,000,000 of tax liability until July 15th.
What hasn’t been extended…yet?
- This is a Federal Treasury Department decision. While some states have already acted to delay the filing and payment obligations, unless all of them respond with similar relief, some state filings and payments will still be required by April 15th.
- First quarter estimated tax payments are still due April 15th, for now. The administration has indicated they are considering delaying the first quarter federal estimate payment as well.
What details are we waiting on?
- The announcement was unclear as to what is required from individuals owing more than $1,000,000 or corporations owing more than $10,000,000.
- At the time of our publishing it seems as though taxpayers are required to file by April 15th and this is merely an extension of time to pay taxes owed. This clarification is especially important for taxpayers who have certain information reporting included in their filings that have steep late-filing/failure to file penalties.
As more details are released, the C&M team will be sure to keep you posted.