The pandemic has created many unusual circumstances for taxpayers and tax administration agencies alike. As a result, the Treasury Department and Internal Revenue Service announced that the federal income tax filing due date for individuals for the 2020 tax year will automatically be extended from April 15, 2021, to May 17, 2021.
The announcement was released on March 17, 2021, less than a month ahead of the original April 15, 2021 deadline. The following highlights information provided in the IRS notification, and we will provide additional updates as formal guidance is issued.
Automatic Extension to May 17
Individual taxpayers automatically receive the May 17 tax filing and payment extension. Individuals who owe federal income tax payments for the 2020 tax year, including those who pay self-employment tax, will not accrue penalties, interest, or additions to tax for unpaid balances as long as payments are received by May 17.
Additional Extension Requests
Should individual taxpayers need time beyond the new deadline to file returns, they may request a filing extension until October 15, 2021. However, the October 15 filing extension does not provide additional time beyond the May 17 deadline to pay taxes due, and interest and penalties will apply to payments received after May 17.
Estimated Tax Payments
Although this automatic extension provides broad relief to many individual taxpayers, the extension does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15, following normal payment procedures throughout the year.
State Tax Returns
The automatic extension only applies to individual federal income returns and tax payments. Taxpayers must continue to file state income tax returns according to their respective state tax agencies.
In the release on the IRS website, IRS Commissioner Chuck Rettig encouraged taxpayers to file as soon as possible, particularly if they are owed a refund. He cites electronic filing with direct deposits as the fastest way to receive refunds and any remaining stimulus payments.
If you have additional questions concerning your individual tax filing requirements, contact a Hantzmon Wiebel team member.