The IRS has expanded its relief in the formal guidance (Notice 2021-21) implementing its extension of the April 15 deadline for individuals to file 2020 income tax returns and 2020 tax payments. Under the guidance, taxpayers now have until May 17, 2021, to do the following:
- File an individual income tax return for the 2020 tax year and make an individual payment for the 2020 tax year
- File a Form 4868 to extend the individual filing deadline to Oct. 15 (does not extend time for payment)
- Contribute to an individual retirement account (IRA), Archer medical savings account, health savings account or Coverdell education savings account
- Report and pay the 10% additional tax on 2020 distributions from IRAs or workplace-based retirement plans
- File an individual claim for refund if the period of limitation expires on or after April 15, 2021, and before May 17, 2021
- Apply to participate in the Annual Filing Season Program for the 2021 calendar year
The relief also extends the time to file a Form 5498 until June 30, 2021. The relief will apply automatically, and individual taxpayers (including individuals who pay self-employment tax) will not be subject to penalties or interest if returns are filed and payments are made by May 17. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021.
The relief remains limited in scope and does not apply to any other payment deadlines or due dates for filing other income tax or information returns, such as Forms 709, 990, 1041 or 1120. The relief also does not apply to individual estimated tax payments for 2021 that are due on April 15.
Importantly, the relief is independent of state and local income tax payment and return deadlines. A few jurisdictions have provided for non-uniform extensions of their corporate, pass-through and individual income tax return payment and due dates, including New Jersey, Maryland and the District of Columbia. While most states and localities have mirrored the federal relief, others have departed from it. Also, some states are providing relief in response to the winter storms in Texas, Oklahoma and Louisiana.
This relief may provide flexibility to some individuals, but individual taxpayers should prepare to make all 2020 federal income tax payments by May 17 at the latest. Individuals who will not be able to file the return by May 17 should file a Form 4868 to extend the filing deadline to Oct. 15. Other taxpayers with April 15 payment and return due dates, such as for Forms 709, 1041, 990 or 1120, should be prepared to file and make payments by April 15 as scheduled, filing for extensions as needed. Taxpayers should also note that broader filing and payment relief until June 15 is available to taxpayers in Texas, Oklahoma and Louisiana.
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As GT's Federal Tax Controversy Lead, Wade focuses on assisting our clients with all aspects of their IRS tax controversy issues.
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