In news that will delight millions of Americans – at least those who end up owing Uncle Sam a tax bill instead of getting a refund – the US government will postpone the April 15 tax-payment deadline for tens of millions of taxpayers by 90 days, giving Americans roughly 3 months pay their 2019 income-tax bills in an unprecedented move.
The IRS, under the authority of President Trump’s national-emergency declaration, will waive interest and penalties as well, Treasury Secretary Steven Mnuchin said at the White House Tuesday. The delay will be available to people who owe $1 million or less and corporations that owe $10 million or less.
The extension was granted to give taxpayers a financial cushion as households and businesses cope with the sudden crash in economic activity caused by the coronavirus outbreak which has brought the US economy to a halt. The move could provide households with hundreds of billions of dollars in temporary liquidity, Mnuchin said last week in previewing the government’s actions.
“We are going to use all the tools we have,” Mr. Mnuchin said on Tuesday. “And what tools we don’t have, we’re going to go to Congress.”
Meanwhile, those who are owed money from Uncle Sam will get it as the IRS will continue to process tax refunds, and Mnuchin urged people who can file their tax returns to do so. Many taxpayers who expect refunds file soon after the IRS opens filing in late January. That is particularly true for low-income households that benefit from the earned-income tax credit, which gives them cash.
About three-quarters of households typically receive refunds, and the IRS will still process returns and send out cash. However, people who file closer to the deadline typically owe money and are waiting to pay. They will benefit the most from Tuesday’s announcement, as will businesses that are worried about their cash flow. – READ MORE