Back to top

Tax Corner - Blog

Click here to go back

Federal Tax Deferral

Posted by Admin Posted on Apr 16 2020

 On March 17, 2020 Treasury Secretary Mnuchin announced that TAX RETURNS ARE STILL DUE APRIL 15. However, payments that are due on April 15th, or due with an extension on April 15th, may be delayed until July 15, 2020 without penalty or interest. If the return is not timely filed, or properly extended the 90-day relief will not apply.

The maximum amount of deferral is $1,000,000 for an individual and $10,000,000 for a corporation

The relief is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020 in respect of an affected person's 2019 taxable year and federal estimated income tax payments due on April 15, 2020, for an affected person's 2020 taxable year. 

Refunds remain unaffected. Interest, penalties, and additions to tax for any postponed amount will begin to accrue on July 16, 2020. In addition, interest, penalties and additions to tax will accrue on any amount above the postponed amount that wasn't paid by April 15, 2020. For example, if an individual owes $1,200,000, then $200,000 is still due by April 15, 2020. The remaining $1,000,000 can be paid by July 15, 2020 without interest or penalties. 

The Maryland Comptroller's Office will conform with the Internal Revenue Service's 90-day extension of federal income tax payments from April 15 to July 15, 2020. Comptroller Franchot said Maryland individual and corporate income taxpayers will be afforded the same relief for state income tax payments. No interest or penalty for late payments will be imposed if 2019 tax payments are made by July 15, 2020. Taxpayers must file for an extension for the filing of FEDERAL taxes by April 15. Taxpayers should refer to the IRS for further details.

Comptroller Franchot also extended business-related tax filing deadlines. The June 1 extension applies to certain business returns with due dates during the months of March, April and May 2020 for businesses filing sales and use, withholding, admissions & amusement, alcohol, tobacco, and motor fuel taxes, as well as tire recycling fee and bay restoration fee returns.

Business taxpayers who file and pay by June 1, 2020 will receive an automatic waiver of interest and penalties.