Steven Mnuchin, U.S. Treasury secretary, right, speaks beside U.S. President Donald Trump during a Coronavirus Task Force news conference in the briefing room of the White House in Washington, D.C., U.S., on Tuesday, March 17, 2020.
Kevin Dietsch | Bloomberg | Getty Images.
The Treasury Department won’t extend the tax filing deadline for 2019 returns, Treasury Secretary Steven Mnuchin said on CNBC.
While the Treasury is giving taxpayers a 90-day reprieve on paying amounts owed from last year, you are still required to get your 2019 income tax return submitted by April 15, Mnuchin said on a phone call with CNBC’s Jim Cramer Wednesday morning.
Under ordinary circumstances, taxpayers must submit returns and payments for the prior year’s taxes by April 15. Filers can request a six-month extension to turn in their tax returns, but taxes owed still must be paid by April 15.
As part of its coronavirus response, the federal government will give filers 90 days to pay on up to $1 million in tax owed.
The reprieve on that amount would cover many pass-through entities and small businesses, Mnuchin said in a press conference on Tuesday.
Corporate filers would get the same length of time to pay amounts due on up to $10 million in taxes owed.
Interest and penalties on those amounts will not apply during that delay.
Though Mnuchin gave some clarity for taxpayers who haven’t yet filed last year’s returns, questions still remain on whether there will be relief for quarterly taxpayers facing deadlines on April 15 and June 15.
Going on extension
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For accountants and tax preparers, the April 15 deadline for returns adds to the pressure they’re already facing during tax season.
Worries over transmitting coronavirus has pushed many professionals to work from home, and some localities are on lockdown.
An oncoming crush of tax documents, along with logistical problems for accounting practices that are working remotely due to coronavirus fears, also means that more filers are likely to wind up on a six-month extension.
This would allow them to turn in their 2019 tax return by Oct. 15.
“It’s a stressor for people in tax practices,” said Ed Zollars, CPA at Thomas & Zollars in Phoenix. “You’ll have people who swear they’ve never gone on extension and they refuse to do it.”
“Okay, but the choice is either you do your return or you find someone else to do it or we go on extension,” he said.
Uncertainty for quarterly payments
Since there hasn’t been any official word on quarterly payments, it may be best for taxpayers to err on the side of caution for those April 15 and June 15 deadlines.
“If you have a quarterly payment due on April 15, plan as if this is a payment that you have to make,” said Jeffrey Levine, CPA and director of advanced planning at Buckingham Wealth Partners in Long Island, New York.
Small businesses may also have to revisit their quarterly estimates if they lose money due to coronavirus. In fact, a number of jurisdictions have ordered small businesses to close their doors or cut their hours to help minimize spread of the disease.
“If you expect your income to go down, especially significantly, then it’s time to recalculate what that liability will be and pay that in as the quarterly estimate,” said Brian Streig, CPA and tax director at Calhoun, Thomson & Matza in Austin.