IRS Extends Tax Deadline 90 Days in Response to Coronavirus
WASHINGTON – The Trump administration announced Tuesday that individuals and businesses will be allowed to delay paying their 2019 tax bills for 90 days past the usual April 15 deadline to July 15.
The extension is an effort to inject up to $300 billion into the economy at a time when the coronavirus appears on the verge of causing a recession.
Treasury Secretary Steven Mnuchin said individuals will be able to delay paying up to $1 million in payments. Corporations will be able to defer payment on up to $10 million.
Taxpayers will still have to file their tax returns by the April 15 deadline. But they won’t have to pay their tax bill for 90 additional days. During that time, individuals and corporations will not be subject to interest or penalty payments.
“All you have to do is file your taxes,” Mnuchin said.
The IRS is using authority under Trump’s national emergency declaration to take the step of approving the 90-day payment delay. Mnuchin encouraged taxpayers to keep filing their returns because many of them will be receiving refunds that they will be able to use to pay bills during the economic downturn.
As of Feb. 21, the IRS had issued more than 37.4 million refunds averaging $3,125.
Among those applauding the move was Rep. Josh Gottheimer, D-N.J., co-chair of the Problem Solvers Caucus, who, along with Rep. Paul Mitchell, R-Mich., requested such an extension last week.
“I commend the IRS for following through on our request so that we can allow North Jersey residents more flexibility to pay for their housing, child care, and medical care, and to help small businesses pay employees at a time when consumer demand is unpredictable,” Gottheimer said on Tuesday.
“It is vital that our federal government be taking immediate action like this to provide certainty for individuals and small businesses at a time when we’re facing a public health crisis and volatility in the market,” he said. “Now, more than ever, Americans need relief from filing and payment penalties. For North Jersey and other communities currently impacted by COVID-19, the focus should be on the health and safety of themselves, their families, and their residents.”
In related news, President Donald Trump on Tuesday asked Congress to unleash a torrent of emergency economic aid — including direct checks to Americans — to counter the drag on the economy caused by the coronavirus crisis.
As part of a proposed economic rescue not seen since the Great Recession in 2008, Trump wants checks sent to the public within two weeks as part of a package that officials said could approach a cost of $1 trillion.
“We want to go big,” Trump said at a White House briefing.
Senate Majority Leader Mitch McConnell promised the Senate would not adjourn until the package was passed.
“Obviously, we need to act,” he said.
But first, the Senate will vote on the House’s $100 billion package of sick pay, emergency food and free testing that’s on track for Trump’s signature.
The latest White House proposal aims to provide a massive tax cut for wage-earners, $50 billion for the airline industry and $250 billion for small businesses.
House Speaker Nancy Pelosi and the chairman of the House Transportation Committee, Rep. Peter DeFazio of Oregon, spoke by phone with Mnuchin in the morning. The Democrats “emphasized that protecting workers’ paychecks and benefits was their top priority, and that immediate action was needed,” said Drew Hammill, Pelosi’s spokesman.
Speaker Pelosi also had a lengthy conversation Tuesday with Federal Reserve Chairman Jerome Powell.
During the 25-minute call, Powell briefed Pelosi on the Fed’s latest actions to respond to the economic impacts of coronavirus.
For her part Pelosi urged the chairman to continue to use the Fed’s authority to assist the most affected state and local governments.
Hammill said the speaker was encouraged by Powell’s assertion that with interest rates at nearly zero percent, Congress will be enabled to fiscally think big as it crafts a robust response to the crisis.
The two pledged to continue their conversations about next steps on Congressional response and future actions by the Fed, Hammill said.