Treasury Secretary Steven Mnuchin announced during a White House briefing that the IRS, using authority under President Trump’s national emergency declaration, will waive interest and penalty charges for 90 days for Americans who owe $1 million or less in taxes, and corporations that owe $10 million or less. The tax return filing deadline will remain April 15.
“If you owe a payment to the IRS, you can defer up to $1 million as an individual — and the reason we are doing $1 million is because that covers pass-throughs and businesses — and $10 million for corporations, interest-free and penalty-free for 90 days. All you have to do is file your taxes,” Mnuchin said. “You’ll automatically not get charged interest and penalties.”
The payment extension is part of the Trump administration’s effort to curb the economic impact of the COVID-19 pandemic – the delay will free $300 billion of liquidity and potentially lessen cash flow issues that some businesses are facing as many people are quarantined and spend less money on dining out, entertainment and transportation.
Individuals and businesses will still have to file by April 15, unless they submit paperwork for an automatic six-month extension, Mnuchin told reporters.
“We encourage those Americans who can file later taxes to continue to file their taxes because you will get tax refunds and we don’t want you to lose out. Many people do this electronically which is easy for them and the IRS,” he said.
As of now, the IRS will continue to process tax returns and pay out refunds as usual. If you’ve been looking forward to getting a check from the government, you’ll need to file your return to get it. The IRS recommends e-filing and choosing direct deposit to get your refund as soon as possible. Nine in 10 taxpayers who use this method and are owed a refund typically get theirs within 21 days of submitting their return.
The administration is also considering the delay of the estimated quarterly tax payment typically due on April 15.
Stay tuned for more information – we will update as changes are officially confirmed.