There is no official IRS or Treasury Department document that has been released providing information on the extension of time to pay income taxes for 90 days (April 15 to July 15). All of this is based upon a news conference at which Secretary Mnuchin spoke about this issue. Here is what he said:
Based upon the news conference there is to be a 90-day period of interest and penalty free time to pay taxes. The amount to be interest and penalty free is up to $1 million for individuals and up to $10 million for corporations.
There was no mention of an extension of time to file your return (or delayed due date for April 15 tax returns). There was no mention of how 1st quarter 2020 estimated tax payments are impacted by this. The Secretary actually encouraged individuals to file on time because most of the returns filed to date have resulted in a refund. There is no information on either the IRS or Treasury websites related to this issue, so it is still being drafted into a formal document that will provide more guidance.
If you will not be filing your Form 1040 by April 15th, it is recommended that you file an extension (Form 4868). By that date, we will (hopefully) have more details about the payment of any balance due that might be owed at that time.
Certain states (e.g., California and Maryland) have related information on extending the due date for tax returns, but there is no detailed guidance yet on who is eligible for the extension and will be free of interest and penalties. The governor of California issued an Executive Order that had the following:
“…who are unable to file a timely tax return or make a timely payment as a result of complying with a state or local public health official's imposition or recommendation of social distancing measures related to COVID-19.”
It is not clear how an individual would prove they were unable to timely file because of social distancing measures related to COVID-19!
Stay tuned for updates.
