Despite continued reassurances that the IRS could handle all of the recent COVID-19 related stimulus — including another round of recovery rebate checks and advance payment of Child Tax Credits — it has bowed to the pressure from lawmakers and some professional organizations and extended some tax filing and payment due dates from April 15 to May 17.
What Is Extended?
Individual tax returns and any payments due for 2020 are extended one month. Taxpayers will not be charged interest or penalties for any return or payment filed by May 17.
What Isn’t Extended?
The following returns and payments are still due April 15:
- Estimated tax payments for first quarter 2021
- Gift tax returns
- Trust tax returns
- Corporate tax returns
Annual payroll tax forms for 2020 (Form 940) and payroll tax forms for the first quarter of 2020 (Form 941) are still due April 30th (the last day of the first calendar month after the calendar year or quarter ends).
It appears as though IRA contributions are still due April 15. Excess contributions may be withdrawn by the due date of your return — now May 17 — or October 15 if you request an extension of time to file.
State Filing Due Dates
As of right now, a handful of states have extended their due dates:
- Pennsylvania, which has extended its due date to May 17
- Maryland, which has extended its due date to July 15
Some Observations
- Many taxpayers are used to paying their first quarter estimate as an overpayment with their timely filed return or request for an extension of time to file in order to provide extra comfort. This is helpful if actual taxable income is higher than anticipated at extension time. Lacking guidance from the IRS, it’s not clear whether such payment made on May 17 will count as a timely payment for the first quarter estimated tax. So, until the IRS clarifies this point, the only way to be certain that your first quarter estimate will be considered timely is to make the payment on or before April 15 using Form 1040-ES. You can consider filing your return or request for an extension of time to file by April 15 with an overpayment. The overpayment may be treated as payment towards the first quarter estimate but we can’t be certain.
- If you usually file on time in multiple states that have a regular deadline on or about April 15, you shouldn’t wait to file your return or request an extension of time to file.
- Even if you file in only one or two states, it may not be wise to wait until close to April 15 to see if those states will follow suit with extending their deadlines.
- It isn’t clear what effect the one month extension will have on the statute of limitations for amended returns.
We expect to get more guidance from the IRS and Treasury Department in the near future. When we do, we will follow up with another update. In the meantime, please contact your Friedman LLP advisor with any questions.
