As we navigate through the market during the Coronavirus pandemic you may notice many headlines regarding the Government’s fiscal response to stabilize the economy. We took the time to outline a few and explain how the changes offer benefit.
On Friday, March 20th, Treasury Secretary Mnuchin announced that the Federal Tax filing deadline has been postponed 90 days to July 15th. Taxpayers that owe can defer payments until the new July 15th deadline, interest and penalty free up to $1 million. According to the IRS, this modification applies to all taxpayers, including individuals, trusts, estates and corporations. Individuals that are due a refund are urged to file by the prior April 15th deadline, as refunds are still being processed within 21 days. Individual State Departments of Revenue are not required to adjust to the new Federal deadline, but many have complied including our home office state of Pennsylvania. These actions should help alleviate the stress of filing during these times and allow individuals and businesses to stay better capitalized during the peak of the coronavirus outbreak.
While investors still anxiously await the fiscal stimulus package being prepared by Congress, the Federal Reserve has taken proactive steps to mitigate stress in the financial markets through monetary policy. In addition to their previous rate reductions, this morning the Fed announced their intention to buy Treasuries as well as corporate and municipal debt in an effort to provide liquidity and keep interest rates low. Their decision to expand their quantitative easing measures to the corporate and municipal markets was cheered by investors as significant stresses had emerged in short term debt markets. In addition, the Fed announced that they intend to establish a program to lend to small and medium sized businesses as a complement to programs available through the Small Business Administration.
We will keep you updated as more information becomes available
Thank you for your patience – stay safe and healthy!
The CooksonPeirce Team