As a response to the unprecedented Covid crisis, yesterday the IRS extended the filing due date for 2020 individual income tax returns from April 15, 2021 to May 17, 2021. This extension is automatic and applies to 2020 federal individual income tax returns only. Thus, individuals can now file their 2020 federal income tax returns and make payments for the 2020 tax year by May 17, 2021 instead of April 15, 2021. Individuals do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief.
This extension does not apply to estimated tax payments and any other federal income tax returns. For example, 2020 federal income tax returns for calendar-year C-corporations and trusts are still due by April 15, 2021. Also, 2021 first quarter estimated tax payments are still due by April 15, 2021 (Planning Tip: taxpayers might consider combining their 2021 first quarter estimated tax payment with their 2020 extension IF they plan to extend on May 17. This would provide a one-month payment and extension calculation deferral).
The IRS extension also does not grant relief for state income tax returns and payments. Individuals should continue to check with their state tax agencies for details on any similar type of relief. At this time, the California Franchise Tax Board has indicated they will also extend the state individual income tax filing and payment deadline from April 15, 2021 to May 15, 2021. Similar to Fed, this extension will not apply to estimated tax payments.
As of now, individuals have until May 17, 2021 to make payments for the 2020 tax year without incurring interest or penalties. Penalties, interest, and additions to tax will begin to accrue on any unpaid balances as of May 17, 2021.
Individuals can request a filing extension before the May 17, 2021 deadline using Form 4868. This will grant individual taxpayers until October 15, 2021 to file their tax returns, however, payments must still be made by the May 17, 2021 deadline.
The IRS announced it will soon release more formal guidance regarding this extension. We will continue to stay abreast on any further updates. Please reach out to the Tax Advisory Team with any questions.
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