On March 17th, the IRS confirmed the deadline to file taxes will be postponed from April 15th to May 17th, 2021. The postponement is due to COVID-19 and the recent passing of the American Rescue Plan Act of 2021, which includes various tax provisions changes, such as an expansion of the Child Tax Credit, changes to unemployment taxability, and business tax provisions.
The Act made the first $10,200 of unemployment income, or $20,400 for married couples filing jointly, tax-free for filers with 2020 adjusted gross income of less than $150,000 (for both singles and couples). It also expanded the child tax credit to $3,000 annually for children ages 6 to 17 and $3,600 per year for those under 6. The Act’s business tax provisions allow businesses who received the Economic Injury Disaster Loan (EIDL) or Restaurant Revitalization grants to be excluded from the business’s gross income for federal tax purposes.
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, not state tax payments or deposits or payments of any other type of federal tax.
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. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
Additionally, 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.
Virtus Law, PLLC continues to monitor changes in this area and will continue to post relevant updates to this website.