IRS extends the filing deadline for 2020 Individual Income Tax Returns
On March 17th, the IRS finally confirmed that the filing deadline for 2020 federal income tax returns will be automatically extended from April 15 to May 17, 2021. Whilst not as generous as last year’s extension to July, this follows weeks of pleas from lawmakers, industry groups, accountants to extend the deadline due to the ongoing effects from the pandemic and late changes to 2020 tax law – for example, the retroactive exemption for up to $10,200 of unemployment benefits.
The extended deadline applied to both the federal income tax return filing and federal income tax payments due, therefore interest and late payment penalties now only begin to accrue from May 17th onwards.
The IRS still urge taxpayers to file tax returns as early as possible, particularly those entitled to refunds or unpaid Economic Impact Payments (EIP). Filing early can also be beneficial if your 2020 income makes you eligible for the latest round of stimulus payments.
As in prior years, an additional filing extension to October 15, 2021, is still available by filing Form 4868. Please note that should there be a balance due, the interest and late payment penalties would still accrue with effect from May 17, 2021.
THINGS TO NOTE:
Estimated Tax Payments – Unlike last year, the due date for 2021 estimated tax payments has not changed, therefore the 2021 Q1 payment is still due by April 15, 2021.
States – This automatic extension applies to federal returns only and not state returns, which will need to be reviewed individually. California has confirmed it will follow the extended deadline, but again, only for 2020 filing and tax payments; not for 2021 Q1 payments. We expect other states will also follow the federal extended deadlines, but you should check each state’s position.
We anticipate further guidance will be issued over the coming days. We will update this blog as more information becomes available. In the meantime, if you have any questions, contact us.