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US tax deadline extended

15th April Federal Tax Payment Deadline – EXTENDED!

NB see further blog on developments to this post

On Tuesday 17th March 2020, the US Treasury announced that individual and corporate taxpayers may be granted a 90-day extension to pay their 2019 Federal tax liability - due to the global COVID-19 outbreak.

Individuals may defer up to $1 million for a further 90 days from the traditional April 15th payment deadline. Corporations may defer up to $10 million. Deferred 2019 Federal tax payments must be paid by 15th July 2020 to avoid any additional interest and late payment penalties being imposed by the IRS.

At present this guidance issued is relevant to only 2019 Federal tax payments due to be paid by 15th April 2020. The treasury has not provided any indication as to whether taxpayers will also have the option to defer estimated 2020 Federal tax payments to a later date. State tax authorities are anticipated to adopt a similar approach for 2019 State tax payments due, however this is likely to be adopted on a state-by-state basis.

The IRS is allowing an extension for various tax payments but have not yet given any relief from the traditional filing deadlines for 2019 tax or information returns. This means that even though there is an extension for paying the tax, the due date for filing the 2019 personal federal tax return remains 15 April. However in practice most of our clients living outside the US qualify for the automatic extension until 15 June, and we also file an extension until 15 October as standard practice.

Please contact your Websters account manager for further details.