The Treasury Department and the IRS have announced an extension for the payment of federal income taxes. At this time, the April 15 filing deadline remains in effect. Taxpayers can file for a six-month extension, which would allow them until Oct. 15, 2020, to file. The payment extension gives individual and corporate taxpayers 90 days to remit payments due with their 2019 income tax returns subject to certain limitations. Once Treasury issues written guidance addressing this extension, additional details or provisions may be included.
This extension applies to both individual and corporations with payments due April 15. Included in the relief provisions announced by Treasury:
Stimulus plans in the works
In addition to payment relief, Congress and the Trump administration are working on various relief packages.
To help mitigate some of the economic impact of the COVID-19 virus, the House of Representatives passed the Families First Coronavirus Response Act (the Act). The Act includes two payroll tax credits to help employers cover wages paid to employees needing time off due to the virus. This legislation has now moved to the Senate. At press time, it is not clear whether the Senate will approve the Act as drafted or modify it (which would require sending it back to the House). We will provide additional details once it passes both chambers.
Furthermore, the White House is proposing an $850 billion stimulus as part of a broader relief package in an effort to maintain liquidity in the economy and assist struggling industries. Treasury Sec. Mnuchin also said the administration is looking for ways to get cash to Americans “quickly.”
Obviously, we are living with very fluid developments in the world, and income taxes and economic stimulus are no exceptions. We will be publishing additional alerts as legislation moves forward. As always, we encourage you to reach out to your Baker Tilly advisor to see how these developments impact your tax position.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.