U.S. Treasury Secretary Steven Mnuchin said President Donald Trump has authorized $300 billion in tax deferrals as the economy suffers from the effects of coronavirus.
Tax deadline expires April 15th. However, in connection with the coronavirus pandemic, US authorities will grant Americans a 90-day extension.
Individuals can defer payments up to $1 million, companies – up to $10 million without penalties.
“We encourage those Americans who can file their taxes to continue to file their taxes on April 15. Because for many Americans, you will get tax refunds.”Steven Mnuchin
Such a change in the deadline for individuals to pay their annual federal income tax returns is unprecedented at the national level, although the IRS often grants such extensions to more limited geographical areas following disasters.
Earlier this month, for example, taxpayers affected by the recent Tennessee tornadoes were granted extensions until July 15 of this year.
“The extended tax payment deadline and penalty relief is likely to be welcomed by taxpayers. This is especially true for those who are dealing with family issues relating to the pandemic. The extension is also beneficial to the IRS as that agency might be facing reduced staffing accompanied by taxpayers unable or unwilling to venture into a government office for assistance. As for tax preparers, we will look forward to a busier than usual summer and fall in 2020.”Gail Perry, CPA, a tax professional and the editor-in-chief of CPA Practice Advisor.
The US Treasury Secretary also offered economic incentives of $1 trillion or more on Tuesday. He suggested sending Americans checks worth $250 billion at the end of April, and four weeks later a second set of checks for the same amount if the situation in the economy remains difficult.
This article will be updated as more information becomes available.