Tax Update – IRS delays 2020 Tax Deadline to May 17, 2021 for Individuals
The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. May 15 fails on a Saturday this year; May 17 is the following business day.
What does this mean?
• 2020 Individual tax returns are due May 17, 2021, instead of April 15; the postponed due date is automatic.
• 2020 federal income tax payments are due May 17, 2021; interest and penalty will not start to accrue until after May 17.
• 2020 individual tax extensions are due by May 17, 2021, but the extended due date is still October 15, 2021.
• An extension filed by May 17, 2021 extends the time to submit your return, but not the time to pay any tax due. Interest will apply, and multiple penalties may apply, to any payments made with returns after May 17, 2021.
• Many states are expected to follow the IRS and extend the 2020 filing deadline to May 17, but we don’t know anything for sure as of today.
• Mississippi has not announced an extension, but we are watching this closely. They have been reluctant in the past, but their will be much pressure for them to follow the IRS lead.
2021 Payments. A major wrinkle in this, and a concern to watch; the changes all have to do with 2020 returns, but nothing has been addressed on 2021 payment schedules. The first estimated tax payments for 2021 are still due on April 15, 2021. So anyone needing to pay with estimated payments will need to make a good faith estimated payment. Many taxpayer advocates, including the AICPA and some in Congress, have asked the IRS to move this first 2021 estimate date to May 17th, and we will send an update if the date is extended.
What to Do. Even though the IRS has delayed the deadline, we will continue to work diligently during this time on your behalf. We plan to treat April 15 as a goal to file as many returns as we can file completely and accurately. We can complete and file your tax returns as usual. But now we do have a cushion for those facing the pressures of this unique year, and have a month to fall back on if needed. If tax is due, it can be paid by May 17th without facing penalty.
Other tax news. Winter storm disaster relief for Louisiana, Oklahoma, and Texas Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma, and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.