WASHINGTON—The Trump administration says individuals and businesses will be allowed to delay paying their 2019 tax bills for 90 days past the usual April 15 deadline. The extension announced on March 17 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 wont 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 Treasury secretary said President Donald Trump had approved the final details of the program, including its expansion to include the potential of allowing taxpayers to keep $300 billion in the economy for now. Last week, Mnuchin had estimated that deferred payments would amount to $200 billion.
Mnuchin had said the delay would apply to all but the “super-rich” but didnt spell out how the payment delay will work. The IRS has yet to release specific guidelines for the program.
The IRS is using authority under Trumps 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 receive 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.
Mark Zandi, the chief economist at Moodys Analytics, said that the tax delay program was only a stop-gap program but that it should help cushion the economy during a period of severe stress.
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