This is the second year in a row that the federal tax-filing deadline has been extended. Last year, the date was extended to July 15, 2020.
What does this extension mean and what do I need to do?
This extension means that individuals now have until May 17, 2021 to file their federal income tax return for tax year 2020. 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 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.
Should I wait until closer to the deadline to file my federal tax return?
No! The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days. Most tax filers receive a tax refund each year, and in 2021 so far, the average amount has been $2,990.
If you are eligible for the first and second Economic Impact Payments (EIP), or stimulus, and you did not receive the full amount or any amount already, then filing sooner would also allow you to claim the Recovery Rebate Credit on your 2020 tax return and receive that money via your tax refund.
Which states have different tax-filing deadlines?
Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This new extension to May 17 nationwide does not affect the June deadline for those states.
Does this extension to May 17, 2021 apply to state tax returns?
The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021. This new federal extension does not currently apply to all state tax payments, deposits, or payments of any other type of federal tax. However, states are looking at the new change and evaluating what to do. There are 42 states, plus the District of Columbia, that require taxpayers to file state tax returns. State filing and payment deadlines vary and are not always the same as the federal filing deadline. Changes are likely in the coming days and weeks. The IRS urges taxpayers to check with their state tax agencies for those details.
Book an appointment with a Jackson Hewitt Tax Pro to file your tax return so you can get every dollar you deserve as soon as possible.