For the second year in a row, the federal income tax filing due date for individuals has been postponed. The postponements come as a part of the fallout of the coronavirus pandemic and the legislation that has resulted from it, which has added complexity to tax filings and systemic strain to the U.S. tax bureau.
On Wednesday, March 17, the Internal Revenue Service (IRS), in conjunction with the U.S. Treasury Department, announced an extension of the federal income tax filing due date for individuals. Individual returns for the 2020 tax year are now due on May 17, 2021, rather than the standard date of April 15, 2021.
The IRS stated their intention to issue formal guidance on the extension soon. As of now, here are the details that we are aware of, per the IRS news release:
- In addition to a filing extension, any federal income tax payments owed for 2020 are also automatically extended to the new due date, with no penalties or interest.
- The filing and tax payment postponements are applicable for self-employed individual filers.
- Taxpayers who do not pay any amounts owed by May 17 will begin to accrue penalties and interest at that point.
- There is no need to file for an extension or contact the IRS—this extension is automatic.
- Individuals who need more time than the May 17due date provided should file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return to apply for an extension through October 15, 2021. This would result in an extension for filing; any payment due would still need to be paid by May 17 to avoid penalties and interest.
- The postponement does not apply to the April 15 deadline for estimated tax payments.
Individual taxpayers should be sure to note that this extension only applies to federal income tax filings. While it is possible that states will follow suit with a due date extension, individual taxpayers need to refer to their state tax bureau for guidance on state income tax filings.
Hancock Askew is urging clients to file 2020 income tax returns by April 15, 2021. Doing so will expediate refunds, plan cash flow for tax payments, avoid bottleneck filing delays with the USPS and IRS, help calculate accurate 2021 first quarter estimates, meet April 15th state filing deadlines, and help us help you wade through ever changing tax laws after filing season.