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Taxes

Income Tax Due Date Goes To May 17

The Treasury and Internal Revenue Service have announced that the due date for individual tax returns has been moved from April 15, 2021 to May 17, 2021. IRS Commissioner Chuck Rettig noted:

“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,”

Despite the extended due date he is still urging taxpayers to consider filing as soon as possible.

Individuals can also postpone federal income tax payments for the 2020 tax year to May 17 without incurring interest or penalties.

The relief does not apply to the first estimated tax payment for 2021 which is still due on April 15.

This announcement by the IRS does not necessarily affect the due date for state returns. They provided a convenient link for you to check out the websites of the states where you may be required to file.

Some Thoughts

Not extending the first quarter estimate along with the return makes life a little difficult. It is a fairly common practice to apply a refund to cover the first and even second quarter estimate. Will the application of the refund be deemed to take place on April 15 or May 17?

And typically you need to have a good handle on your return in order to decide on your estimated tax requirements particularly if you are using a safe harbor. All in I think my friends on #TaxTwitter will not be pleased about first quarter estimates not being in line with the balance due.

The announcement is in IR-2021-59 with a headline of “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline”. I really wish that people would stop calling the due date “Tax Day” since it implies that it is a good idea to file on the deadline.

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