Pursuant to President Trump’s emergency declaration under the Stafford Act, the United States Treasury Department and the Internal Revenue Service have extended from April 15 to July 15 the deadlines to file income tax returns and pay taxes. Individuals and non-corporate tax filers may defer payment of up to $1 million of federal income tax, including self-employment tax to July 15 without penalties or interest. Corporate taxpayers may defer to July 15 the payment of up to $10 million in federal income taxes. The IRS has also delayed to July 15 the first installment of quarterly estimated tax payments required from businesses and self-employed individuals.
The Robert T. Stafford Disaster Relief and Emergency Assistance Act was enacted in 1988. It is codified at 42 U.S.C. §§ 5121-5207. The Act provides the legal authority for the federal government to provide assistance to states during declared major disasters and emergencies. The Act authorizes the delivery of federal technical, financial, logistical, and other assistance to states and localities during declared major disasters or emergencies. The Federal Emergency Management Agency (FEMA) coordinates administration of disaster relief resources and assistance to states. Federal assistance is provided under the Stafford Act if an event is beyond the combined response capabilities of state and local governments.
As Treasury Secretary Steven Mnuchin explained, “[t]his 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 hardworking Americans and businesses have additional liquidity for the next several months.” These extensions should provide a welcome financial boost as the country battles the effects of the COVID-19 outbreak, by adding about $300 billion of additional liquidity into the economy. However, taxpayers expecting a refund of federal income taxes paid should file their returns as soon as possible.
Taxpayers must separately consider the filing and payments deadlines of state and local taxing authorities. We await word on whether Kansas will follow the federal government’s lead and enact similar filing and payment deferrals.