The IRS announced on March 17, 2021 that the due date for 2020 personal income tax returns has been automatically extended to Monday May 17, 2021. This applies to both the tax return filing and payments for balances due on 2020 federal tax returns.
The IRS stated in its release that the 1st quarter 2021 estimate date has not been extended to May 17th and is still due April 15, 2021. Any 1st quarter estimates paid after April 15, 2021 will be considered late and the taxpayer may be subject to penalties on their 2021 return.
The IRS has not provided guidance on whether this extension applies to the due date of 2020 IRA and HSA contributions.
This extension only applies to personal income tax returns (Form 1040). It does not apply to any 1120 or any other return type with a April 15th due date.
States will need to decide whether they will conform to this automatic extension for filing and payment due date.
If you are one of our current clients that normally pays quarterly estimated taxes, we urge you to still file by April 15th so that your 2021 estimates can be calculated accurately and paid on time.
The IRS press release can be read here. We will update this post as more information is released by the IRS and states.
The state of Indiana has announced that the individual income tax filing and payment date has been extended to May 17, 2021 to match federal. Indiana reminds taxpayers that this automatic extension only applies to the filing and payment of 2020 taxes and all other due dates remain unchanged. 1st quarter 2021 estimates are still due April 15, 2021. INDOR’s press release can be read here.
The IRS announced that they will automatically calculate refunds due to taxpayers that filed returns with unemployment income prior to Congress excluding $10,200 per taxpayer. These refunds will start in May and continue throughout the summer. The IRS press release can be read here.
The IRS does note that an amended return will be required for those taxpayers who become eligible for federal credits not on their original return due to the excluded unemployment benefits. If the taxpayer qualified for the credit on their original return the IRS is able to calculate the new credit amount after excluding the unemployment income and an amended return is not required.
The state of Indiana and Michigan have not updated their position on unemployment income.
The American Rescue Plan Act (ARPA) passed by Congress on March 6, 2021 temporarily increased the Child Tax Credit, for 2021 only, from $2,000 per qualifying child to $3,000 per qualifying child age 6...
PPP Loan Forgiveness Application, Timing, and Deductibility of Expenses The SBA has slowly started to approve PPP Loan Forgiveness applications after political pressure. We have seen multiple...