Individual taxpayers and businesses will have an extra 90 days to pay the Internal Revenue Service (“IRS”) if they owe federal income tax for tax year 2019.
Normally, taxpayers must make payment of taxes owed by April 15. However, Treasury Secretary Steven Mnuchin recently announced that individual and small business filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million, without incurring any interest or penalties, until July 15, 2020.
This extension to pay does not extend the deadline to file federal tax returns. As such, the normal due date to file federal tax returns remains April 15, for now. For those taxpayers who are not able to make the normal filing due date, relief is available by requesting an automatic six-month extension, making October 15, 2020 the new filing deadline. To obtain this filing extension, individuals must submit Form 4868, and businesses must submit Form 7004, to the IRS by April 15. Keep in mind that this filing extension does not impact the new deadline to make payment of taxes owed by July 15, 2020.
This announcement also does not affect the deadline for state income tax payments. However, with a change in the federal tax payment deadline, it is anticipated that most states will likely follow suit. Until there is an official announcement by a state, assume that the state income tax payment deadline remains the same.
There is reporting that the administration is also considering delaying the estimated quarterly tax payments that self-employed workers and businesses pay the IRS throughout the year. The first payment is typically due by April 15.