Corporate tax payers can defer up to $10 million in owed tax payments under new emergency measures introduced on Wednesday.
The U.S. Treasury Department and the Internal Revenue Service (IRS) issued guidance allows corporate taxpayers a s deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest.
The guidance also extends to all individuals and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments .
This guidance does not change the April 15 filing deadline.
“Americans should file their tax returns by April 15 because many will receive a refund. Those filing will be able to take advantage of their refunds sooner,” said Treasury Secretary Steven T. Mnuchin.
“This deferment allows those who owe a payment to the IRS to defer the payment until July 15 without interest or penalties. Treasury and IRS are ensuring that hard-working Americans and businesses have additional liquidity for the next several months.”
The action of deferring tax will result in about $300 billion of additional liquidity in the economy in the near term. Treasury and IRS will issue additional guidance as needed and continue working with Congress, on a bipartisan basis, on legislation to provide further relief to the American people.
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.
Under the emergency order, high-deductible health plans (HDHPs) can pay for 2019 Novel Coronavirus (COVID-19)-related testing and treatment, without jeopardizing their status. This means that an individual with an HDHP that covers these costs may continue to contribute to a health savings account (HSA).
The IRS said that health plans that otherwise qualify as HDHPs will not lose that status merely because they cover the cost of testing for or treatment of COVID-19 before plan deductibles have been met. The IRS also noted that, as in the past, any vaccination costs continue to count as preventive care and can be paid for by an HDHP.
This notice applies only to HSA-eligible HDHPs. Employees and other taxpayers in any other type of health plan with specific questions about their own plan and what it covers should contact their plan.