On August 8, 2020, President Trump issued an executive memorandum (that action was not technically an executive order but is referred to in this article as an “order”) authorizing certain employees to defer Social Security withholding from their payroll checks (6.2%) beginning September 1, 2020, and through the end of the calendar year, with the deferred taxes being due in 2021. The President does not have the legal authority to unilaterally forgive taxes, so the order directed the Department of the Treasury (referred to in this article as the IRS) to “explore avenues, including legislation” to forgive the deferred taxes.
COVID-19 Extends Tax Deadline to July 15, 2020, but How Long Should You Really Wait?
It is not news that the IRS extended the 2019 tax deadline from April 15, 2020, to July 15, 2020. This extension means that taxpayers can defer federal income tax payments without penalties and interest, regardless of the amount owed. The deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers and includes those who pay self-employment tax. The extension is automatic, so taxpayers do not have to file any additional forms with the IRS to qualify. As it turns out, the extension is a good thing because the agency is currently overwhelmed with processing millions of stimulus payments pursuant to the CARES ACT in this COVID-19 crisis.
