The Internal Revenue Service (IRS) has delayed the April 15 tax filing deadline to May 17, giving taxpayers an extra month to pay any PPP taxes or outstanding levies.
Small business owners were blindsided by the news that they may owe thousands or millions of dollars for the Paycheck Protection Program (PPP) loans they received last year.
A PPP loan can be forgiven as long as at least 60% has been spent on employee payroll costs. Forgiven PPP loans are tax exempt. But those who spent their PPP loans on expenses other than payroll will owe taxes on the loan.
“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” House Ways and Means Chair Richard Neal and Representative Bill Pascrell said in a statement Wednesday. “While we are pleased with this 30-day extension, we will continue to monitor developments during this hectic filing season.”
The tax deadline extension was also necessary because IRS workers are busy processing a third round of $1,400 checks. The IRS said Wednesday it has so far sent about 90 million payments totaling $242 billion.
As of early March 2021, the IRS has been behind in the number of tax returns filed and processed, and in the number of refunds issued.