On Wednesday, March 17, the IRS and The Treasury Department announced an automatic extension of time to file and pay 2020 Federal individual income tax filings from April 15, 2021, to May 17, 2021. The extended filing deadline gives individuals more time to prepare or make updates to their tax returns.
This extension was issued on the heels of the recent American Rescue Plan Act of 2021, which included further stimulus opportunities and enhancements or extensions to other recent stimuli to help Americans weather the ongoing health and economic crisis caused by the COVID-19 pandemic.
Key Extension Details:
- The 30-day extension is automatic and individual taxpayers do not need to make a special election to qualify.
- The extension also applies to any tax payments related to 2020, regardless of the amount, which would have otherwise been due. Therefore, taxpayers will not incur penalties and interest if payment is made by the new May 17 deadline.
- Current guidance only provides relief to individual income tax filers towards the 2020 Form 1040 returns and income tax payments due.
This tax filing extension does not apply to:
- 1st quarter 2021 individual estimated income tax payments
- Trust returns
- Gift returns and/or State filings
Please note: These returns and any payments are still due April 15, 2021 and there will be no waiver of penalties and interest for late payments.
- The IRS relief for victims of the February winter storms in Texas, Oklahoma, and Louisiana will not be impacted. These filers still have until June 15 to file and pay 2020 individual taxes.
Despite the extension, the IRS is urging taxpayers who are due a refund to file as quickly as possible. Most tax refunds associated with electronically filed returns are sent within 21 days. Our Tax Team will continue to monitor any updates as additional guidance becomes available. If you have questions about the information outlined above or need assistance with a tax or accounting issue, we can help.
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With a depth of experience in federal, state, and local taxation issues and a wealth of experience across industries, our team of tax advisors will help you to take advantage of every opportunity to minimize your tax liability and reinvest in your business. Please reach out to our Tax team if you need tax assistance or have questions about how this deadline extension will impact your business.
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Sources: IRS, Accounting Today, Allinial Global Partners – KBKG and Mueller Prost