was issued on March 17, 2021, notifying taxpayers that the once resolute individual tax filing and payment deadline would be pushed back yet again – this time to May 17, 2021.
The current extension is much more limited than last year’s, applying only to individual filers rather than a blanket extension for all returns and time-sensitive acts. Based on recent testimony of IRS Commissioner Charles Rettig during a House Ways and Means Oversight Subcommittee hearing on the filing season, we may not see further expansion. When questioned, Commissioner Rettig stated that the one-month extension was an accommodation only for the most vulnerable individuals who may still have trouble accessing information necessary to prepare their individual income tax returns.
To be clear, the guidance released to date is much less formal than we would want or expect given the impact of an extended deadline. For example, with 2021 first quarter estimated payments still being due on April 15 but 2020 extension payments delayed until May 17, it is unclear how any overpayment on the 2020 return resulting from an extension payment will be treated. Thus must be addressed, and soon.
However, we know questions persist as to where things stand today, and so we have put together the below Q&A based on the best information available at this time. We will update the Q&A as more guidance is released.
The following Q&A details the information contained in IR-2021-59:
Q: Is the one month extension to file my tax return automatic?
A: Yes. No action is required on the part of the individual taxpayer to participate in the one month extension. Individuals needing an extension of time to file until October 15, 2021 must still file Form 4868 by May 17, 2021.
Q: I am an individual and I owe taxes for 2020; do I also have an extension of time to pay until May 17, 2021?
A: Yes. Payments due for individual income tax returns will not accrue interest or penalties until May 18, 2021.
Q: Do entities other than individuals get an extension to file and pay?
A: No. Only individuals filing Form 1040 receive an automatic extension of time to file and pay 2020 tax due.
Q: Are first quarter 2021 estimated payments for individuals and entities extended to May 17, 2021?
A: No. First quarter estimated tax payments for calendar year filers are still due April 15, 2021.
Q: Does the relief provided in the News Release apply to estate and gift taxes?
A: No, normal filing and payment due dates continue to apply to estate and gift taxes.
Q: Is the deadline for making contributions to IRAs and HSAs extended as well?
A: Most likely. This is should be addressed in forthcoming guidance.
Q: When is my individual income tax state return due?
A: State income tax filing deadlines are left solely to the discretion of the state. While some states may automatically conform to Federal deadlines, many do not and enact their own deadlines. Consult your state’s tax agency for more information.
Q: Do taxpayers affected by disaster declarations that have a June 15, 2021 deadline now need to file by May 17, 2021?
A: No, the individual filing and payment extension to May 17, 2021 does not impact taxpayers in Texas, Oklahoma, and Louisiana who previously had their Federal due date extended to June 15, 2021.
RubinBrown will continue to monitor guidance and provide updates as the information becomes available.
By: Tony Nitti, CPA, MST
By: Amie Kuntz, CPA, MA
Readers should not act upon information presented without individual professional consultation.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.
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For a second straight year, the Internal Revenue Service has delayed the April 15 tax filing deadline. IRS news release