“At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
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Teeny Tiny breaks from Virginia.
On March 19, 2020, Governor Northam made the following announcement:
“Businesses impacted by COVID-19 can also request to defer the payment of state sales tax due tomorrow, March 20, 2020, for 30 days. When granted, businesses will be able to file no later than April 20, 2020 with a waiver of any penalties.
The Governor has requested that the Department of Taxation to extend the due date of payment of Virginia individual and corporate income taxes. While filing deadlines remain the same, the due date for individual and corporate income tax will now be June 1, 2020. Please note that interest will still accrue, so taxpayers who are able to pay by the original deadlines should do so.”
So, business can request sales tax deferral for 30 days and avoid penalties (not interest). Query whether they will grant it quickly or you won’t find out for 60 days. Individuals still have to file on time, but now have an automatic 30 day extension to pay as well. Still accrues interest. I guess a slice of bread is better than no bread at all.
IRS payment deferral included April 15 Estimated Payments as well
According to IRS Notice 2020-17, income tax payments and estimated tax payments due on April 15, 2020 are extended to July 15, 2020 (under $1 Million for individuals and joint returns). It does not extend June 15 estimated payments however. Further, it does not extend filing deadlines for tax returns. Lastly, it does not say that if you e-file a return and mark the box to pay the tax by debit on the due date whether that debit will occur on April 15 as originally planned or on July 15, the new payment due date.
Some Guidance – File by 4/15 pay by 7/14
Here’s what we know so far.
“Mnuchin, on Tuesday, also announced that the Treasury Department would not extend the deadline to file taxes by the April 15 deadline, as much of the tax filing can be done online.
“We encourage Americans who can file taxes to continue to file taxes on April 15 because for many Americans, you will get tax refunds and we don’t want you to lose out on those tax refunds,” Mnuchin said.
Mnuchin added that if individuals or corporations owe money to the Internal Revenue Service after filing their taxes, those payments now are able to be deferred for up to 90 days interest-free.
“If you owe a payment to the IRS, you can defer up to $1 million as an individual, and $10 million to corporations, interest-free and penalty-free for 90 days,” Mnuchin continued. “File your taxes, you’ll automatically not get charged interests or penalties.”
No Tax Holiday’s Yet
The IRS has NOT issued any guidance allowing for late filing or payment. We are waiting to see if there was anything in the newly passed COVAD relief bill once it is passed. Neither Virginia nor DC have allowed extensions for any taxes as yet. That means despite pledges to assist small businesses, Sales Tax filings, Withholding tax filings, and payments will all be due as usual. Remember that intentional failure to pay withholding tax liabilities or sales tax liabilities creates personal liabilities to those making that decision be they owners, or employees. It does not matter if the business is a limited liability company or a corporation, the liability attaches if you prefer other creditors to the tax authorities. So, don’t ignore or put off those obligations.