In direct response to the fallout associated with the COVID-19 pandemic, Treasury Secretary Steven Mnuchin announced that individuals and corporations would be granted a 90-day deferral in making tax
payments
. Individuals can defer up to $1 million in payments for 90 days from April 15, 2020, while corporations may defer up to $10 million in payments for 90 days. During the deferral period, the IRS will not charge interest or penalties. This equates to an interest-free loan from the federal government until
July 15th. It is Treasury’s hope that this action will provide much needed assistance to individuals and business as they face the challenges associated with the pandemic.
The announcement fell short of providing an extension from April 15th
filing
requirements. It should be noted, however, that an automatic 6-month extension is available upon request.
Individuals and corporations should be alert to the fact that the federal payment extension does not apply to state and local tax obligations.
At this time, West Virginia, Pennsylvania, and many other states have not indicated how they might respond to the federal action.
More formal direction from the Department of Treasury is pending at this time.
