Treasury Secretary Steven Mnuchin announced that his department is pushing back the April 15 deadline to pay taxes owed, giving individuals and many businesses 90 extra days to send checks to the government.
Individuals can defer up to $1 million of tax liability and corporations get an extension on up to $10 million, Mnuchin said Tuesday at a news conference Tuesday.
“All you have to do is file your taxes,” he said. “You’ll automatically not get charged interest and penalties.”
The payment extension, which affects millions of taxpayers, is part of the Trump administration’s effort to curb the economic effects of the coronavirus pandemic. Mnuchin said the delay will free $300 billion of liquidity in the economy as individuals and businesses have more time to pay their taxes.
Delaying payment requirements will give businesses and individuals nearly three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.
“This is a commonsense step to afford individual Americans and businesses access to financial resources they need during this time of economic and social disruption,” Senate Finance Committee Chairman Chuck Grassley said in a statement.
The administration is also considering delaying the estimated quarterly tax payments that self-employed workers and businesses pay the IRS throughout the year, according to two people familiar with the matter. The first payment is typically due April 15.
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SOURCE: Bloomberg, Laura Davison