• Michael Trout

IRS to Delay 2021 Income Tax Filing Deadline to...

April 15 is not the tax filing deadline for 2021. Officials with the Internal Revenue Service and the U.S. Department of the Treasury have said the 2021 income tax filing and payment deadline will be pushed back, likely to May 17, 2021.


April 15 is not the tax filing deadline for 2021. Officials with the Internal Revenue Service and the U.S. Department of the Treasury have told several media outlets (Reuters) and Congressional offices that the 2021 income tax filing and payment deadline will be pushed back to May 17, 2021. (A May 15 deadline was discussed, but as it falls on a Saturday this year, May 17 is the expected date.) It is possible this date will change.

[This article will be updated as more information is available.]

The move follows requests from tax and accounting professionals, tax technology companies, business leaders and state governments, who've highlighted the dramatic challenges faced by individuals and businesses due to the Covid-19 pandemic on their operations and finances. The just-passed American Rescue Plan Act of 2021, which includes $1,400 stimulus payments to most Americans, also includes various tax provisions, such as an expansion of the Child Tax Credit, changes to unemployment taxability, and business tax provisions.


These changes, as well as the large and continuing Payroll Protection Program business relief package, may have caused some taxpayers and businesses to have difficulty meeting the original April 15 deadline.

The IRS is also still struggling to process millions of income tax returns from last year, when the filing season was delayed until July 15. Last year's delay in the filing and payment deadline for U.S. income taxes was the first time America's taxing agency has made an across-the-board delay in the deadline that applied to all Americans.


In arguing for a delay in both the tax filing and the payment deadline, the American Institute of CPAs (AICPA), the nation's largest organization for accounting professionals, noted that, “Even the IRS – faced with a significant mail processing backlog, a delayed start of the 2021 tax season, inundated phone lines, and a new round of COVID-19 relief payments – is overwhelmed. Denying a postponement of this filing and payment deadline disregards and further exacerbates the continued difficulties being faced by these families and businesses."


Another organization, the National Association of Tax Professionals (NATP) sent a letter to IRS Commissioner Charles P. Rettig last month requesting his consideration of a filing extension.


“Preparers are currently waiting on tax law guidance to accurately prepare their clients’ returns,” explains NATP Executive Director, Scott Artman, CPA.


“Without this, returns will be filed inaccurately and incompletely, and ultimately there will be a need for more amended returns to be prepared. This not only increases the work for the preparer who is already dealing with a compressed tax season but will also result in additional expense to the taxpayers who will have to pay to amend their returns.” - Artman

NATP recently surveyed tax pros to find out what their preference for the 2021 Tax Day would be. More than 70% of respondents indicated their support of a filing date later than the current April 15.


State income tax deadlines are set by state laws, and may or may not be extended to coincide with the new IRS deadline. Taxpayers should check with a tax professional or their state tax agency website for guidance.


One Final Note: Those $1,400 stimulus payments are not taxable, nor were the stimulus payments that came before. They will not adversely affect tax returns or refunds from last year or this year.


Understanding the "American Rescue Plan"


We will keep you updated as this story develops. As always we hope everyone is staying safe and healthy.


-Mike

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