By Janet L. Houston
Pursuant to the emergency declaration issue by President Trump on March 13, the Secretary of the Treasury is providing relief to everyone who has a federal income tax payment (including self employment tax) due on April 15. The due date for those payments has been postponed to July 15, 2020. The deferral applies to both 2019 balances due and 2020 first quarter estimated tax payments. Individuals can defer up to $1,000,000 of tax liability without incurring any penalty or interest on payments made within the deferral period. Corporations can defer up to $10,000,000. At this point, it is an extension of time to pay, but not an extension of time to file, so taxpayers will still either have to file their tax return by April 15 or file for an automatic 6 month extension by April 15. Some states may also follow suit regarding deferral of payments – we will monitor that.
The extension of time to pay applies only to federal income tax (including self employment tax). The payment of other types of federal tax is not affected by the Notice issued on March 18.
Jan Houston has extensive experience in representing high-net-worth clients in the areas of taxation, estate planning and business planning. Her practice focuses primarily on tax and estate planning including multi-generational planning and incorporating charitable giving into estate plans. In addition, Jan assists business owners with succession planning and also handles income tax and estate tax audits.