May 17 deadline

The Internal Revenue Service (IRS) announced that any individual income tax filings and payments due on April 15, 2021 are postponed to May 17, 2021. No interest and penalties (regardless of the amount) will apply if a payment is made by May 17, 2021. Individual taxpayers need not file any forms or call the IRS to qualify for this automatic extension. This approximately one-month extension gives taxpayers additional time to file returns and pay any outstanding payments due. The IRS does, however, encourage filers, especially those who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

The delay also helps the IRS, who is significantly behind the number of tax returns filed and processed, due to the pandemic. They have also been tasked with processing a third round of stimulus payments. The filing season started about two weeks later than usual (on February 12, 2021) and has contributed to the backlog.

What is not extended?

  • The first quarter federal individual estimated tax payments are still due 4/15/21.
  • Gift tax returns
  • Fiduciary returns
  • C corps filings

States haven’t yet provided guidance on whether they are following the May 17 deadline. You can check with your state tax agencies for those details.

Complex filing year

It is a complex filing year, particularly after the American Rescue Plan Act (ARPA) was passed. ARPA included a retroactive provision to allow some taxpayers to exclude up to $10,200 of unemployment compensation from income. Many tax returns have already been filed taxing the unemployment compensation.  We are waiting for IRS guidance on whether amended tax returns are needed to exclude the compensation and to allow the taxpayer to receive a refund.

Some taxpayers have received notification that the second stimulus payment was sent, but the taxpayer didn’t receive it.  IRS’ guidance is to call IRS at 1-800-919-9835 to trace the payment and to not report the stimulus payment as received on the personal income tax return.

The IRS will be providing formal guidance in the coming days. Please contact us at 401-831-0200 if you have questions.

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