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 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.
The IRS and Treasury provided further clarity for taxpayers in a notice on Wednesday afternoon, providing relief to "any person with a federal income tax payment due April 15, 2020." This would include quarterly taxpayers with an April 15 first-quarter tax deadline.
Going on extension
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.
Quarterly payments
Quarterly taxpayers also get some relief on their first quarter taxes due April 15, according to the Treasury's Wednesday notice.
Their payments are pushed back to July 15.
However, the deadline for second quarter payments is June 15, an issue that's already raising questions among accountants. They are concerned that as the notice is written, it would seem you're paying the second quarter's taxes on June 15, then the first quarter's taxes a month later.
Small businesses may also have to revisit their quarterly estimates if they lose money due to coronavirus. 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.
If you've already filed and are now making scheduled payments for taxes owed, consider calling the IRS to revisit the arrangement.
"If they're making scheduled payments, they might've done that before their work hours got cut back," said Jeffrey Levine, CPA and director of advanced planning at Buckingham Wealth Partners in Long Island, New York. "They might need that money to live on."
Check with your state
Don't forget that the Treasury's relief efforts apply only to your federal income tax return. Your state may have its own delays.
For instance, California is granting a 60-day delay for affected individuals and businesses unable to file on time.
Meanwhile, Maryland is giving additional time for certain business tax returns, and the state will grant an extension to individuals in line with the federal government delay.
The American Institute of CPAs is keeping a list of states' tax developments here.
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