The 2020 tax season is underway, but millions of Americans have yet to start preparing their tax returns. Earlier this week, in response to the COVID-19 pandemic, Treasury Secretary Steven Mnuchin offered taxpayers a 90-day reprieve on paying their income taxes. As of Friday, March 20, the deadline to file tax returns has also been extended by three months. Taxpayers will now have until July 15th to file and pay their 2019 income taxes (up to $1 million). During this time, filers will not incur interest on unpaid taxes or be subject to tax filing penalties. According to Wealth Management, “this reprieve amount would also likely apply to small businesses and pass-through entities. Corporate filers, on the other hand, would get the same length of time to pay amounts due on up to $10 million in taxes owed.”
The relief provided by the IRS is available solely with respect to federal income tax returns due on April 15, 2020 and not to state tax returns. Taxpayers will need to check with their state’s tax agency for changes in filing and payment deadlines.
The Oregon Department of Revenue (“ODR”), on its Covid-19 Tax Relief Options webpage, states that the ODR is tied to the IRS filing and payment due dates for personal income taxes. If the IRS declares the April 15th due date to be extended due to the COVID-19 pandemic, Oregon will automatically connect to those dates for personal income tax filers. Oregon taxpayers should regularly check the ODR’s webpage for updates regarding filing and payment deadlines.
Historically, taxpayers procrastinate on their taxes, but it is prudent to prepare tax returns well in advance. In 2018, experts estimated that over 14 million people waited until the last day to file their returns, causing the IRS website and filing system to crash in the early morning hours. The situation was not resolved until early evening, and although the IRS extended the filing deadline, panic ensued for many taxpayers who had waited until the last day to file.
Despite the 3-month extension, it would be prudent to get your 2019 income tax returns filed as soon as possible, especially if you are due a refund.