Tarlow Tax Update for March 18, 2020

The Treasury Department and the IRS have decided on an extension for the time to make payments of federal income taxes; however, the April 15 filing deadline remains in effect. Taxpayers can request a six-month filing extension to Oct. 15, 2020.

Individuals and corporate taxpayers have 90 days to remit tax payments due with their 2019 income tax returns subject to certain limitations. Further details from the Treasury Department are expected to be approved shortly and we will communicate updates to you as they are announced.

The payment extension applies to both individuals and corporations with payments due April 15.

Included in the relief provisions announced by the Treasury Department are:

  • Individuals can defer up to $1 million in taxes due.
  • Corporations can defer up to $10 million in taxes due.
  • Payments of estimated quarterly tax payments paid by self-employed workers and businesses are also being considered for extension.  The first quarter estimated tax payment for individuals is due April 15.
  • It is critical to note that these payment deadlines apply to federal returns; they do not automatically apply to your state filing and payment requirements.

Stimulus Plans in the Works

Congress and the Trump administration are working on various relief packages. The House of Representatives passed the Families First Coronavirus Response Act (the Act). The Act includes payroll tax credits to assist employers in paying wages to employees needing time off due to the virus. This legislation has now moved to the Senate. We will provide additional details once it passes both chambers.

The President is proposing an $850 billion stimulus package as part of a more comprehensive relief package to maintain liquidity in the economy and assist industries hurt by this pandemic. The administration is also seeking ways to get cash to Americans as soon as possible.

We are all experiencing unprecedented circumstances, and income taxes and economic stimulus are no exceptions. Tarlow Partners and staff members remain dedicated to providing the superior level of service our clients have always received from us.  We are committed to preparing and filing your tax returns in a manner that is both timely and responsive to your needs and any concerns.  As always, should you have any questions concerning these tax filing and payment relief measures, please do not hesitate to contact us.  We will communicate additional updates as legislation is announced and approved.