90-Day Extension on Federal Tax Payments and MN Dept of Revenue 30 day grace period for Sales & Use Tax
A 90-Day Extension on Federal Tax Payments
In response to the COVID-19 epidemic, Treasury Secretary, Steven Mnuchin, has passed a 90-day extension on Federal tax payments. Taxpayers now have until July 14, 2020, to pay 2019 taxes owed.
Individual taxpayers can delay payments of up to $1 million in income taxes owed; corporations can defer up to $10 million in payments.
During the 90-day extension, the IRS will not charge interest or penalties.
Taxpayers should check with their state’s tax deadline for delays as this postponement on payments applies only to federal returns.
At this time, the April 15 filing date has not changed.
In a press conference held on Tuesday, March 17, 2020, Treasury Secretary, Steven Mnuchin, announced an automatic 90-day extension on 2019 tax payments in response to the COVID-19 epidemic. For 2019 tax filings, individuals can delay payment of up to $1 million in taxes owed, while corporations were granted deferment of up to $10 million in payments. During this 90-day period, the IRS will not charge interest or penalties. Taxpayers should be aware that, at this time, the April 15 tax filing deadline for federal taxes has not changed.
While taxpayers are receiving a little more time to pay federal taxes owed, it is recommended individuals and corporations refer to their state guidelines for extensions on tax payments and the filing of 2019 state tax returns. The American Institute of CPAs (AICPA) has compiled a list of states’ tax developments – click here for more information.
There is, however, some further clarification needed regarding Mnuchin’s announcement, which did not address 2020 estimated tax payments, payroll taxes, or estate and gift taxes. As additional information is released regarding this announcement and its implications, we will be updating our COVID-19 Resource Center and ensuring that our clients and communities have access to complete and accurate information.
Minnesota Department of Revenue grants a 30-day grace period for Sales and Use Tax
It was announced on March 18, 2020 that the Minnesota Department of Revenue has granted a 30-day grace period for Sales and Use Tax for the March 20, 2020 payment due date for certain businesses. Those identified businesses, found in the Executive Order 20-04 (linked below), should still file their return by March 20 but will have until April 20 to make payment without penalties or interest.
The following resources may be helpful as you navigate these important developments:
We are committed to keeping you well informed during this unprecedented situation and will continue to monitor this situation closely. Watch for further communications, or click here to be directed to our COVID-19 Resource Center, as we are made aware of new developments or receive further clarification around these announcements.
We are here during these uncertain and challenging times to answer your financial questions and concerns. We will continue to hope for the safety and well-being of you and your loved ones.
ABDO, EICK & MEYERS, LLP
Kevin Kalal, CPA
Partner, Real Estate & Construction Leader