IRS Issues Guidance On Tax Payment Deferrals March 19, 2020On Tuesday Treasury Secretary Steven Mnuchin announced that individuals and corporations can delay their tax payments for 90 days due to the coronavirus pandemic.On Wednesday, the Internal Revenue Service released further details on the change. The bottom line: People who want to delay their tax payments must submit their tax returns or an extension to the IRS by April 15 to claim this benefit without risking interest or penalties. The three-month extension to pay federal income taxes doesn’t change the obligation to file the return or extension by April 15.THE NEW GUIDANCE STATES:FOR COMPANIES – The due date for making Federal income tax payments due April 15, 2020 is postponed to July 15, 2020. The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return. Basically – Corporations can defer up to $10 Million in payments. This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.FOR INDIVIDUALS – The due date for making federal income tax payments due April 15, 2020, is postponed to July 15, 2020.The amount eligible for relief for most taxpayers is up to $1,000,000 regardless of filing status. That means, for example, that the relief is essentially per return, granting the same for a single individual as for married individuals filing a joint return. This payment relief includes self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. Individuals have the ability to defer the following payments:• 4/15 – 2019 liability tax payments • 4/15 – 2020 Q1 estimated tax paymentsPlease note the June 15th, 2nd quarter estimate payment due date has not been extended.IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.FOR ALL –• The new deadline announced applies to federal tax income payments only. It’s up to states to set their own deadlines. Maryland business and individual income taxpayers will be afforded the same relief. No interest or penalty for late payments will be imposed if 2019 tax payments are made by July 15, 2020. For state tax developments related to the coronavirus outbreak, see the American Institute of CPA’s list here.• Interest, penalties and additions to tax will accrue on tax in excess of these amounts due but not paid by April 15, 2020.• The tax return filing deadline is currently NOT extended. While 2019 tax payments will be deferred, it appears that the filing date will remain April 15, 2020, unless an extension is requested. We are currently monitoring this situation.If you have questions or concerns on how this may impact your situation, please contact your KatzAbosch representative, or contact us by clicking here.This update brought to you by: Your trusted advisors at KatzAbosch.About KatzAbosch: Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As an accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal and a Top Workplace four times by The Baltimore Sun.