Administration announces 90-day deadline for many tax payments

WASHINGTON — The Trump administration said individuals and businesses will be allowed to delay paying their 2019 tax bills for 90 days past the usual April 15 deadline. The expansion announced Tuesday is an effort to inject up to $300 billion into the economy at a time when the coronavirus appears poised to cause a recession.

Treasury Secretary Steven Mnuchin said individuals will be able to delay payment of up to $1 million in payments. Companies will be able to defer payment for up to $10 million.

Taxpayers will still have to file their tax returns by the April 15 deadline. But they won’t have to pay their tax bill for another 90 days. During this period, individuals and corporations will not be subject to interest or penalty payments.

“All you have to do is file your taxes,” Mnuchin said.

The Treasury Secretary said the President donald trump had approved the final details of the program, including its expansion to include the option of allowing taxpayers to keep $300 billion in the economy for now. Last week, Mnuchin estimated the deferred payments would amount to $200 billion.

Mnuchin had said the delay would apply to everyone except the “super rich,” but did not elaborate on how the payment delay will work. The IRS has yet to issue specific guidelines for the program.

The IRS is using authority under Trump’s national emergency declaration to take the action to approve the 90-day payment deadline. Mnuchin encouraged taxpayers to keep filing because many will receive refunds they can use to pay their bills during the economic downturn.

As of Feb. 21, the IRS had issued more than 37.4 million refunds averaging $3,125.

Mark Zandi, chief economist at Moody’s Analytics, said the fiscal delay program was only a stopgap program, but should help cushion the economy during a time of severe crisis.

“Individuals and small businesses need cash right now,” Zandi said. “Anything that delays them from sending a check to the IRS will allow them to pay for groceries, make mortgage payments, and pay other bills.”

Under normal filing procedures, taxpayers must pay their obligations by April 15, although they can get a six-month extension to file the full return.

Mnuchin, who spoke to reporters at the White House, said that as part of a stimulus package being negotiated with Congress, the administration is considering ways to send checks to Americans to help mitigate the impact of job losses due to layoffs in restaurants and the tourism industry. .

“Americans need money now, and the president wants to give money now and I mean now in the next two weeks,” Mnuchin said.

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AP White House reporter Darlene Superville and AP business reporter Sarah Sell contributed to this report.