US Treasury Sec. Steven Mnuchin officially extended the IRS tax filing deadline to July 15, 2020, to help individuals and businesses adversely affected by the coronavirus pandemic.
This updates a previous announcement earlier this week extending the tax payment deadline only to mid-July.
Mnuchin made the announcement during a daily coronavirus briefing from The White House on Friday. He echoed the statement on Twitter before the IRS website reflected that information.
At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.
— Steven Mnuchin (@stevenmnuchin1) March 20, 2020
“Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically,” IRS Commissioner Chuck Rettig says in a statement. “Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I’m incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment.”
— IRS (@IRSnews) March 20, 2020
Still, Mnuchin urged Americans who are owed tax refunds from the IRS to file before the original deadline to ensure they get their tax refunds as soon as possible.
Mnuchin said, “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. We don’t want you to lose out on those tax refunds.”
To date, the IRS is reporting it has processed over 67.99 million income tax returns as of March 6. And according to the agency, 52.7 million of these filers already have their tax refunds, with an average of $3,012. The IRS expects to process more than 150 million individual returns this year.
The Previous Rules on Extension
Before the change Mnuchin announced, taxpayers could apply for a six-month automatic extension. This meant you could extend your 2019 date until October 15, 2020. However, in order to avoid penalties and interests, you had to pay the required tax amount by the filing due date.
The New Extension
The goal of the new extension is to help businesses keep their enterprises going at a time when their cashflow is minimal or nonexistent. For small business owners, the 90-day delay can be the difference between staying in business or not. And this is not an exaggeration when it comes to small businesses.
Additionally, the Trump administration is also looking to delay the quarterly April tax payments for up to 180 days. By delaying their estimated taxes for up to two-quarters businesses can address their cash flow problems. The Trump administration is authorizing a total of $300 billion of these tax deferrals.
This will bring the total to $400 billion the executive branch is proposing to lawmakers, which also includes relief for student loan interest payments in addition to the delay of the tax deadlines. The President’s economic advisor said the administration was ready to double the next package to $800 billion.
According to Mnuchin the help to small businesses include options for fast cash loans and expediting loans from the SBA.
The extension announced by Mnuchin only covers the federal government. This means you have to pay your state taxes according to the time tables they currently have in place.
With that said, some states are also implementing their own extensions to address the problems of the outbreak. The amount of time the states are extending varies. Again, make sure to find out what they are.
The American Institute of CPAs has a list of the changing state tax deadline for each state here.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don’t have an income tax. Tennessee and New Hampshire do not tax wages earned.
Coronavirus-related Economic Stimulus
In addition to the extensions, Secretary Mnuchin is also seeking an economic stimulus package of $850 billion or more.
This includes payment to small businesses and critical industries. Mnuchin went on to say the Trump administration wants to provide business interruption payments. The goal is to have these funds in the hands of Americans as fast as possible.
Mnuchin said, “Americans need cash now and the president wants to get cash now. And I mean now, in the next two weeks.”
Image: Whitehouse.gov More in: Coronavirus Biz Advice