"All individual and other non-corporate tax filers will be allowed to defer up to $1 million of federal income tax, including self-employment tax, payments due on 15 April 2020, until 15 July 2020, without penalties or interest", read the statement, which said corporate taxpayers paying up to $10 million in federal tax payments would get similar waivers.
Treasury Secretary Steve Mnuchin also urged taxpayers to file their returns on time for the 15 April deadline, set by Internal Revenue Service (IRS).
"Americans should file their tax returns by 15 April because many will receive a refund", Mnuchin said in the statement. "Those filing will be able to take advantage of their refunds sooner. This deferment allows those who owe a payment to the IRS to defer the payment until 15 July without interest or penalties. Treasury and IRS are ensuring that hardworking Americans and businesses have additional liquidity for the next several months".
The deferment in tax collection is among a raft of stimulus measures worth $1.3 trillion in total planned by the Trump administration to mitigate the economic effects of the pandemic, which has infected more than 7,500 Americans and killed at least 120 while shutting down large swathes of the economy.
China’s Wuhan first became the epicenter for the pandemic that has spread to all corners of the planet, infecting more than 214 000 people and killing over 8,700. The World Health Organization has declared the outbreak a pandemic.