The president has announced that he will allow individuals and businesses impacted by the coronavirus (COVID-19) to defer tax payments without interest or penalties. Congress is also discussing cutting payroll taxes as part of a set of measures aimed at providing relief during the coronavirus pandemic.

Here are the details

Under current IRS rules, taxpayers get an automatic extension on filing their tax returns, but their payments are still due by April 15^th. The delay allows individuals to not have to pay their taxes by the April 15 deadline. All interest payments or other penalties would also be waived.

The idea here is that taxpayers should not have to worry about filing IRS forms in the middle of a public health emergency.

Who does the delay apply to?

All taxpayers affected by the virus are able to defer taxes.

The President has also ruled that the Small Business Administration (SBA) will start providing low interest loans for businesses in states and U.S. territories that have been affected by the virus. This is intended to help small businesses overcome the economic disruptions that have been caused by the virus. The president has requested that an additional $50 billion in funding be contributed to the SBA.

The delay does not apply to large corporations or very wealthy taxpayers but no specific income or asset thresholds have been announced.

Treasury Secretary Steven Mnuchin expects the payment delay to put more than $200 billion back into the economy that would otherwise go to paying taxes next month.

It is not immediately known how long impacted taxpayers will have to get their tax payments in, but we will keep you updated as things develop.

Questions? Contact us. Check out our Coronavirus Resource Center.