America has entered uncharted territory while fighting the pandemic spread of coronavirus. In order to adhere to the CDC’s guidelines of social distancing, major cities across the nation have enforced a full lockdown, making any semblance of normal life to be but a memory. With society being instructed to work from home, millions of people have found themselves out of a job, which makes paying taxes on time seem impossible.
Benjamin Franklin famously wrote in a letter to Jean Baptiste-Leroy in 1789, “In this world, nothing can be said to be certain except death and taxes,” a phrase which eerily still rings true. While citizens of the United States are still required to pay taxes amid the deadly coronavirus outbreak, the due date to pay the IRS is no longer April 15.
While at first, White House Treasury Secretary Steve Mnuchin announced that individuals and businesses will have an extra 90 days to pay the IRS if they owe additional income tax for 2019, that date has now been extended to July 15.
Trump announced during a press conference on Friday, “Hopefully by that time, people will be getting back to their lives.”
For individuals and small businesses, they can defer payment of up to $1 million, and for corporations, $10 million, without having to worry about being penalized with interest payments or accruing penalties.
However, the are numerous important asterisks to this announcement that taxpayers must make note of when it comes to the deadline of both filing and paying their 2019 taxes.
There Is A Difference Between Filing Taxes On Time & Paying Taxes On Time
Just because payment deadlines are officially extended 90 days from April 15, that does not mean there’s an extension to file your taxes.
During Tuesday’s press conference 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.”
For those that want or need to file an extension, the previous rules are still in place. As in previous years, taxpayers can request a six-month extension to file their taxes.
There Is A Difference Between State & Federal Tax Income Due Dates
Mnuchin’s announcement about a 90-day extension to pay taxes is only in regard to federal taxes. Therefore, individuals must also check to see what their state has announced in regard to state income payments.
For example, in California, considering residents in the Bay Area are in lockdown mode for the next three weeks, the state has extended taxpayers’ deadline to June 15.
“During this public health emergency, every Californian should be free to focus on their health and wellbeing,” said State Controller Betty T. Yee, who serves as chair of the Federal Tax Bureau. “Having extra time to file their taxes helps allows people to do this, as the experts work to control the spread of coronavirus.”
As stated on California state’s official website, “The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period. Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.”
Other states which have announced tax payment extensions include Maryland, Connecticut, and South Carolina. To check on your state’s tax payment ruling, the American Institute of Certified Public Accountants‘ official documet will be continuously updated.