The Trump administration plans to delay the April 15 tax deadline for most individual taxpayers as well as small businesses as part of an effort to mitigate the effects of the spread of the novel coronavirus, Treasury Secretary Steven Mnuchin said Wednesday.
(Update: On Friday, March 13, 2020) President Donald Trump announced he was declaring a state of emergency over the Coronavirus. As of this update, the Treasury Department and the IRS have not yet announced the new tax deadline.
President Donald Trump has instructed the Treasury Department and IRS to extend the April 15, 2020 deadline for filing federal income tax returns for those affected by Coronavirus. The change is only for this year.
The unprecedented change in the deadline for individuals to file their annual federal income tax returns comes as the nation, and the world, are combating the Covid-19 Coronavirus pandemic. The change was announced on Wednesday, March 11, 2020, by President Donald Trump during an address to the nation from the Oval Office.
Trump said he would direct the Treasury to “defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.”
The president did not state the date to which taxpayers will be allowed to delay their tax filings, but it is expected to be between June 15 and October 15. Nor did the president specify which taxpayers would be eligible for this tax deadline relief.
The president also announced restrictions on travel to Europe and that the Small Business Administration will offer assistance to businesses facing disruption.
With a change in the federal filing deadline, most state legislatures are likely to follow suit, since most taxpayers file their federal and state income tax returns at the same time. Seven states do not have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
Such a change in the deadline for individuals to file their annual federal income tax returns is unprecedented at the national level, although the IRS often grants such extensions to more limited geographical areas following disasters. Earlier this month, for example, taxpayers affected by the Tennessee tornadoes were granted relief until July 15 of this year.
"The extended tax deadline and penalty relief is likely to be welcomed by taxpayers," said Gail Perry, CPA, a tax professional and the editor-in-chief of CPA Practice Advisor. "This is especially true for those who are dealing with family issues relating to the pandemic. The extension is also beneficial to the IRS as that agency might be facing reduced staffing accompanied by taxpayers unable or unwilling to venture into a government office for assistance. As for tax preparers, we will look forward to a busier than usual summer and fall in 2020."
"The extended deadline will give people more time to get their information together and certainly will help those who owe money if they are allowed to delay payments also," said Tom Wheelwright, a CPA and the CEO of WealthAbility. " At the same time, the delay will bring relief to IRS workers, by "giving them more time and spreading out the work more," Wheelwright said.
While millions of Americans have already filed their taxes this year, particularly those anticipating refunds, a large portion of taxpayers, particularly those who have a debt to the IRS, wait until the deadline.
Under current law, any taxpayer can get a six month extension to file their taxes if they are unable to do so by April 15 of any year, without stating a reason, simply by filing an IRS Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Taxpayers expecting to owe taxes to the IRS when they file their return are still generally required to make that payment by April 15.
Source: Article by By Isaac M. O'Bannon, Managing Editor - CPA Practice Advisor