The Treasury Department and the IRS made an announcement today about extending the federal tax filing deadline to May 17, 2021. The ongoing pandemic continues to be the main reasons behind this extension.
First of all, the tax year started a little later than usual – February 12, which is about 2 weeks past the beginning in any other year. The loss of those two weeks put tax accountants and filers at disadvantage by squeezing them into a shorter time frame. The ongoing pandemic has also made it more difficult on certain population to look for help with tax related questions and assistance.
Another reason for extending the filing deadline has to do with the new stimulus package. It was signed into law by the president just a little over a week ago and it includes numerous changes to the tax code. It has created a great deal of confusion as we are well into the filing process as roughly 55 million tax returns processed.
One of those changes is the provision that waives the federal income tax from the first $10,200 a person received in jobless benefits. The IRS is expected to provide a formal guidance related to the new deadline and what the individuals who received the jobless benefits and already filed taxes should do.
It is important to know that the new deadline of May 17 applies to federal taxes only. State income taxes are still due at their original deadlines. It is possible that individual states will push the deadline and align it with the federal, but there have been few updates on it at this time. The IRS is still urging taxpayers to submit their returns as soon as possible, especially if they anticipate to receive a refund.
There are no changes to the extended filing deadline. It is still October 15, but if individuals owe taxes, the interest and penalties may start being assessed after May 17.