On Tuesday, the White House announced some details on how taxpayers will be able to defer any tax payments they might have.
“If you owe a payment to the IRS, you can defer up to $1 million as an individual,” said Treasury Secretary Steve Mnuchin, adding that the payments would be “interest free and penalty free for 90 days.”
“All you have to do is file your taxes; you’ll automatically not get charged interest in penalties,” Mnuchin said during a corona virus briefing with President Trump looking on.
But another tax-day ritual isn’t changing: You still have to file by April 15.
President Donald Trump looks on as Treasury Secretary Steven Mnuchin addresses the daily corona virus (COVID-19) briefing at the White House on March 17. (REUTERS/Jonathan Ernst)
Texas Congressman Kevin Brady, the ranking Republican on the House Ways and Means Committee, made that clear in a press release: “Taxpayers should file by April 15 as normal and the deferral will be applied automatically.”
The process for getting an extension remains the same as any other year: You have to file form 4868, giving taxpayers until October 15 to file a return and pay anything owed.
The IRS provided some details Wednesday about how the deferral will work. The notice underlined the fact that “This guidance does not change the April 15 filing deadline.” The notice also defines “any person with a Federal income tax payment due April 15, 2020” as being affected by corona virus.
A continued push to delay the filing deadline
Getting clarity on the issue has been challenging. On March 10, Democratic lawmakers on the Ways and Means Committee sent a letter to the IRS to try find out more about any changes for the filing season. “We request your continued evaluation of whether there is any need to extend the tax filing season beyond the April 15 deadline,” they wrote. A spokesperson for the committee confirmed Wednesday morning that it had yet to receive a response.
House Ways and Means Committee Chairman Richard Neal (D-MA) was the first signer on a letter to the IRS asking about delaying the tax filing deadline. (REUTERS/Yuri Gripas)
On Monday, Congressman Tom Suozzi, a Democrat who represents parts of Long Island and Queens, followed up in a statement. “I am now calling on the Treasury Secretary Mnuchin and IRS Commissioner Rettig to extend the deadline to file tax returns,” they added, saying we need to ensure financial security “by giving people the extra resources they need during this difficult time.”
Caroline Bruckner, a professor at American University, noted in an email that the delay is helpful not only for people who owe but also for “low-income folks who rely on volunteer income tax assistance programs to do their taxes, many of which have been temporarily shut down."
Policymakers are encouraging taxpayers who are expecting a refund to file as soon as possible. IRS data through March 6 shows that almost 68 million Americans — roughly half of all filers based on previous years – have taken that advice. Nearly 53 million Americans (at least) have already gotten their refunds.
As for those who remain, on Wednesday, Bruckner had succinct advice in an interview with Yahoo Finance to those who expect a refund: “File right now.”
Update: This story has been updated with additional details released by the IRS on Wednesday.
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.
Reference: Yahoo News
