Finally, there is some good news for those impacted by coronavirus-related shutdowns: the government is giving Americans a slight break on their taxes.
“If you owe a payment to the IRS, you can defer up to $1 million as an individual,” said Treasury Secretary Steve Mnuchin, adding that the payments would be “interest free and penalty free for 90 days.”
“All you have to do is file your taxes; you’ll automatically not get charged interest in penalties,” Mnuchin said.
The catch: You still need to file your taxes by April 15. And the extension applies only to federal taxes.
But Mnuchin also advised Americans to file now because many get refunds. “We encourage those Americans who can file their taxes, to continue to file their taxes on April 15 because for many Americans you will get tax refunds. We don’t want you to lose out on those tax refunds,” Mnuchin said.
As always, taxpayers can file form 4868 to get an extension until Oct. 15 to file a return and pay anything owed.
So far, though, the Internal Revenue Service has offered no details on its webpage about the coronavirus.
Senate Finance Committee Chairman Chuck Grassley (R-IA) applauded the move.
“This is a commonsense step to afford individual Americans and businesses access to financial resources they need during this time of economic and social disruption,” he said.
“The administration is also considering delaying the estimated quarterly tax payments that self-employed workers and businesses pay the IRS throughout the year, according to two people familiar with the matter. The first payment is typically due April 15,” the Los Angeles Times reported.
The Treasury Department on Wednesday also said it wants to start issuing checks to Americans of $1,000. The first set would start going out April 6 and a second set would follow in mid-May. The full cost to the federal government would be $500 billion.
“The Treasury plan, which requires approval by Congress, also recommends $50 billion to stabilize the airlines, $150 billion to issue loan guarantees to other struggling sectors, and $300 billion to for small businesses. The plan appears to anticipate that some of the loans would not be repaid,” the Associated Press reported.
The details are for the third coronavirus response bill that lawmakers hope to pass next week. Direct payments would go to U.S. citizens only, and would be “tiered based on income level and family size.” The two payments would be identical, with the second wave starting by May 18.
Mnuchin said the full stimulus package to shore up the economy is expected to top $1 trillion.
The White House and Congress have moved quickly to craft two coronavirus spending packages, and President Trump on Tuesday began pushing another $850 billion stimulus, mostly in the form of tax relief measures. About $500 billion would be tied to a payroll tax cut, with $250 billion in the form of Small Business Administration loans and another $58 billion directed to the airline industry.
Trump also wants the federal government to send checks to Americans within the next two weeks to stem the effects of the coronavirus on the economy, Mnuchin said Tuesday. “The president has instructed me we have to do this now,” he said at a White House briefing attending by the president. “Americans need cash now — and I mean now, in the next two weeks.”