At a press conference held today, U.S. Treasury Secretary Steven Mnuchin announced that taxpayers will receive a three-month extension of time to pay the income taxes owed for 2019. During the three-month deferral period, taxpayers will not be subject to interest and penalties. As of the time of this writing, it is not clear how this affects 2020 estimated tax payments; quarter one is typically due April 15th and quarter two is due June 15th. Given the intent, we are hopeful the extension will apply to those payments as well and will update you when we find out more.
Mnuchin explained that individuals can defer up to $1 million of tax liability and corporations get an extension on up to $10 million. Tax returns or extensions should still be filed by April 15th for those taxpayers with a December 31st year end.
What does this mean for you?
The tax payment deadline on April 15th has been officially pushed back to July 15th for 2019 tax liabilities. All taxpayers are advised to make an effort to prepare and submit their 2019 income tax return as soon as possible, especially for those who are expecting a refund. At Barnes Dennig we are proceeding with “business as usual” and encourage you to not delay submitting your tax documents. For those who are able to, Mnuchin strongly encouraged Americans to file their taxes on or before April 15th as it may take longer than usual to process and receive a refund. As of March 6th, the IRS has processed more than 65 million income tax returns, and about 52 million filers will receive a tax refund, averaging $3,012.
With this new federal deadline in mind, it is important to check your state’s position. With the coronavirus (COVID-19) pandemic impacting many employers ability to operate at full capacity, many states have rolled out delays. The AICPA is keeping a list of states’ tax developments, which can be accessed on the AICPA website here.
Each state is rolling out different information in reference to filing 2019 tax returns. Ohio, Kentucky and Indiana have not announced their deadline extensions, but are expected to follow the federal government’s decision.
Please contact your Barnes Dennig advisor with any questions or call (513) 241-8313, and one of our tax professionals can assist you.
The Barnes Dennig team will be closely monitoring this situation and keep you informed as more information becomes available.