On March 20, Treasury Secretary Mnuchin tweeted that “all taxpayers and businesses will have additional time to file and make payments without interest or penalties.” It is expected the IRS will follow up on Mr. Mnuchin’s announcement with a notice providing detailed guidance regarding the deadline extension.
Earlier this week, the IRS issued official guidance providing that individuals and businesses could postpone income tax payments due April 15 until July 15. The details of the tax payment postponement, including limitations on the amount eligible to be postponed, were included in our March 19 update here.
As noted in the March 19 alert, we expect that many state tax authorities will respond to the IRS payment and filing extensions by extending their tax deadlines. California acted last week to extend its state income tax payment and filing deadlines to July 15.
BPM is monitoring all these developments, including in Congress, where lawmakers are currently drafting the CARES Act in response to the COVID-19 pandemic. This draft legislation contains many tax provisions affecting individuals and businesses. We will keep you apprised of developments as warranted.
Reminder and Planning Tip – As of today, it appears the due date for making a 2019 IRA contribution is unchanged. If so, that deadline remains April 15. Individuals are allowed to make 2019 traditional or Roth IRA contributions of up to $6,000 (or $7,000 if over 50 at the end of 2019) or, if less, up to the amount of their 2019 earned income. Higher income taxpayers are not allowed to contribute to a Roth IRA and contributions to a traditional IRA may not be deductible based on income limitations and eligibility to participate in an employer’s retirement plan.
BPM will update this communication as additional IRS and state tax information is provided by the tax authorities and when formal guidance is issued. Please reach out to your BPM tax advisor with any questions.