The Treasury Department and IRS announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.
Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.
Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868, but taxpayers still need to pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
Selective Extension
According to an IRS press release, the relief does not include estimated tax payments that are due on April 15 by millions of small business owners and individuals who pay estimated taxes. The extension also does not include the following:
- Trust income tax payments and return filings on Form 1041
- Corporate income tax payments and return filings on various Forms 1120
In a statement issued today, the American Institute of CPAs expressed concerns about the selective nature of the extension. “While we appreciate the IRS’ recognition that a filing deadline postponement is indeed necessary, the announcement is far too selective in who is receiving relief,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “In fact, the taxpayers who are most likely to benefit from this additional time are taxpayers who are able to meet the original filing deadline.”
The AICPA continues to advocate for an extension of all April 15 filing and payment deadlines to June 15.
New Jersey Filing Deadline
Even prior to today’s IRS announcement, the NJCPA has been advocating for New Jersey to follow any IRS deadline extension. To this end, legislation has already been introduced by Senator Paul Sarlo; however, given the selective nature of the IRS extension, the legislation may need to be modified. As currently drafted, the legislation would extend the April 15, 2021, GIT and CBT filing and payment deadlines, and the March 15, 2021, PTE filing and payment deadline (which is currently on an April 15 grace period), to May 15, 2021.
We will provide updates as they become available.
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