On March 17, Treasury Secretary Steve Mnuchin announced a new tax plan to stimulate the economy during the COVID-19 crisis. Under the new plan, individuals and corporations can defer $1 million, and $10 million, respectively, in tax payments for 90 days. Importantly, individual and corporate taxpayers can take advantage of the new plan without incurring any interest or penalties.
Secretary Mnuchin stated that taxpayers who are burdened by COVID-19 will want to take advantage of this plan. Ideally, the reprieve will provide more flexibility and liquidity for taxpayers as they tackle the ongoing pandemic.
However, if taxpayers are expecting tax refunds, they should continue to file their returns by April 15. The Secretary stated that taxpayers who file by the deadline will receive their refunds in a timely manner.
Importantly, while the time for payment has been extended, the time for filing tax returns has not. Individual and corporate returns, as well as applications for an extension, must still be filed by the due date—April 15.
At the California state level, the FTB also announced on March 17th that taxpayers are entitled to an extension until June 15, 2020 to file 2019 California tax returns and make certain payments. This extension applies to partnerships and limited liability companies as well as individual filers. The FTB will waive all penalties and interest that would otherwise apply.