I have wanted to communicate with you concerning the Coronavirus and the impact on your tax return but there has been nothing to report until now. Secretary of the Treasury Steven Mnunchin announced at a press conference on March 17, 2020 an extension for paying your taxes due to the Coronavirus pandemic.
Unfortunately, the announcement is as clear as mud and still raises some questions. Here are the facts as I see them as of this writing:
The announcement has not changed the deadline date for filing your individual tax return. Tax returns are still due by April 15.
If you owe taxes you will have a 90-day interest free penalty free period to pay the tax by July 14 (90 days from April 15) – (“The Deferment Period”).
Here are the issues as I see them right now
- What is unclear is what to do about quarterly estimated tax payments that are due on April 15 and June 15.
- What happens if you owe money but don’t file by April 15.
- If you file an extension on April 15 and file your tax return before the end of the deferment period and you owe taxes, do you still qualify for the deferred tax payment.
- If you file an extension and then file your tax return by October 15, when does your obligation to pay your tax with the extension occur – April 15, 90 days later or October 15
- If you are looking to amend your 2016 income tax return the deadline date to file that return is April 15, 2020. Will this be extended?
While I have my suspicion as to the answer to the above issues, I do not want to speculate in this space right now.
As of this writing, filing dates for New Jersey and New York have not changed. If you live outside these two states, please check your states’ department of taxation website to see if the filing date has been moved. This is fluid and can change at any time.
The potential of a payroll tax holiday, similar to the payroll tax holiday that happened during the financial crisis of 2008/2009 does not appear is going to happen. As of today, it is not part of the legislation that has been agreed to by the House of Representatives and the Treasury Department. I am monitoring the Senate version. What was announced at the aforementioned press conference is the issuance of payments to individuals to help those in needs and stimulate the economy.
In closing, it is very important to realize that the details around these programs are still being worked out and have not yet been announced. I will keep monitoring the IRS and the Treasury Department and if there is anything that needs to be reported concerning your taxes, I will let you know. In the meantime, lets follow the rules of social distancing and taking our normal hygiene to another level.
Feel free to reach out to me to discuss your situation. Be safe everyone.
Harry E. Hunter
President
Hunter Consulting, Inc.
YOUR Tax and Accounting Authority
March 18, 2020