This year's annual federal tax return filing deadline has been moved from April 15 to May 17.
Yep, for the second consecutive year, our 1040 forms won't have to be in or on their way to Uncle Sam's tax collector until after the traditional deadline. And yes, COVID-19 is the reason, largely because of tax law changes and backlogs related to the pandemic.
But many of those who had urged an automatic delay for Tax Day 2021 are not impressed by the IRS action.
Sure, we now have a bit more time to file our personal returns, but little more. In the eyes of many who work in the tax world, the limited change also brings added problems and confusion. And at least for now, it's all over but the crying. And cursing. And grumbling. And Tweeting.
Pressure finally paid off, sort of: The IRS, particularly Commissioner Chuck Retting, had resisted changing the annual deadline from the usual mid-April day to, well, any later date for months. So in one regard, his acquiescence to shift Tax Day to May is a victory. But only partial.
And, based on the social media reactions, not a popular one.
Hey #TaxTwitter - Is anyone thinking about gift tax returns? Are they automatically extended with 1040s if 1040 ext not filed until 5/17? Do we need to file a separate gift tax extension this year now? This one month extension is going to cause two extra months of work.— Rosalind Sutch, CPA (@iHeartTax) March 18, 2021
For now, though the bottom line is that your federal tax return is not due until Monday, May 17.
Here are some questions and answers about the Tax Day 2021 change.
Why May 17? The IRS didn't explain how it came up with just a month's automatic extension. But I can tell you why the new 2021 Tax May Day — and yes, pun is intended — was selected.
May 15 this year is a Saturday. If the IRS had simply moved the April deadline a month instead of a month-plus-two-days, the deadline would have shifted anyway to May 17. So to avoid even more, albeit minor, confusion, the agency chose the next business day as the official new filing deadline.
Do I have to do anything to get the May 17 deadline? No. The IRS announcement automatically makes the Tax Day change effective for individual taxpayers (more on this in another question later in this post). You don't have to do anything but keep working on your return so that you meet the new deadline.
What's due on May 17? This now is the day that you must file your federal tax return for tax year 2020. That is if your federal tax return is Form 1040 or 1040-SR. This covers sole proprietors who file Schedule C with their personal, individual tax returns.
But May 17 does not apply to other business filers. The usual, not-postponed tax deadlines still must be met by corporate and partnership taxpayers, as well as by nonprofits.
If your return is covered by the new Tax Day, that means by midnight local time (or preferably before in case you encounter a computer issue) on May 17, you must hit "send" on your keyboard if you file, as the IRS encourages, electronically. Or you must get your paper return to your local U.S. Postal Service branch so that the envelope will be postmarked May 17.
It's also the day that any taxes you owe are due. By remitting them on May 17, you'll avoid any late-payment interest accrual or penalty charges. This postponement applies to individual taxpayers, including individuals who pay self-employment tax.
But slip even one day, and the IRS reminds us that penalties, interest and additions to tax will start accumulating.
I already set up payment of my 2020 tax bill for April 17. Will the IRS push back collecting my money? No, it will not. If you used the Electronic Federal Tax Payment System (EFTPS) or any other e-payment system set up by the IRS, then those arrangements are still scheduled to take effect on April 15 or earlier date that you chose.
You can, however, now change the due date to May 17.
For most of the IRS' e-payment options, you need to call the agency's Payment Services toll-free at (888) 353-4537 to request the previously scheduled payment be canceled. The IRS says, however, to wait seven to 10 days after your return was accepted before calling.
But don't dally either. The cancellation request must be made by 11:59 p.m. Eastern Time (not your time zone) two business days before your payment's scheduled transmittal date.
Users of the IRS Direct Pay option can use their confirmation numbers from the payment to access the Look Up a Payment feature. There you can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
If you, like me, do use EFTPS, it's pretty easy to cancel and reschedule payments via its website. Yes, I speak from experience.
And if you've set up the payment via a credit card or you bank account bill payment system, contact those payors directly to make changes.
In all these cases, if you cancel a previously made tax payment, make sure you reschedule another one to meet the May 17 deadline.
Is May 17 now also the IRA contribution deadline? The IRS didn't say so in its official announcement, but the tax community consensus is that you do have until May 17 to contribute to a Roth or traditional IRA and designate it to count toward the 2020 tax year.
The IRA contribution question has been asked of the IRS. I suspect the agency soon will issue a clarification about (and hew to) this usual Tax Day deadline retirement option.
That said, consensus ain't official. So I wouldn't take any chances if you're planning to make a prior-year traditional IRA contribution, especially if you plan to also deduct it on your 2020 tax return.
To ensure that you 2021 IRA money does count toward 2020, make the contribution by April 15. Even if that turns out to be early, you get a month more or earnings.
When is my first 2021 estimated tax payment due? Sorry, but this extra tax payment required of folks who get money that isn't subject to payroll withholding is still due by April 15. Don't miss this deadline or you'll face those dreaded penalty and interest charges on your estimated tax amount.
Ok #TaxTwitter, on the phone earlier today with a client discussing the new 5/17 deadline.— Eric A. Bonney, CPA (@EABonneyCPA) March 18, 2021
Client: So I have until 5/17 to pay 2020 and file, but need to file 2020 in order to figure out my Q1 2021 estimate that is due 4/15?
Me: This is correct
Client: Um... I am not the tax
Confusing? Yes. But let's be honest. Uncle Sam's collections have been hit by deadline delays for more than a year now. He wants at least some of the cash to keep operations going as soon as he can get it.
Is May 17 my state's tax deadline now, too? Taxpayers in 42 states and the District of Columbia face filing some sort of 2020 tax year state return. Most of those jurisdictions follow the IRS lead when it comes to filing because taxpayers in most of those states must use federal filing data when they fill out their state returns.
So the assumption is that those states with a usual April 15 tax due date will shift to May 17, too. That's what happened last year when the federal filing deadline was moved to July 15. And per social media today, Colorado, Pennsylvania and California have aligned their 2021 filing deadlines with the IRS change.
But remember what they say about assuming … or taking the word of someone on social media. Check with your state's tax office about tax deadlines this year.
Most states likely will announce any Tax Day changes on their website's home pages. The ol' blog's state tax directory has links that will get you to those state tax offices' online presences.
What if I can't make May 17 either? No worries. You can always file for an extension using Form 4868. Submitting this form to the IRS by May 17 will give you until Oct. 15 to get your Form 1040 to the tax agency.
But remember, this six-now-five-month extension only applies to filing your forms. You still must pay any tax you owe by May 17.
I live in a state hit by a disaster and already got more time to file. Does the May 17 change affect me? No, if you live in parts of Texas, Oklahoma or Louisiana that took hard hits from February's Arctic Blast, then the IRS extended your disaster-related filing deadline to June 15. That summer due date remains in effect for y'all.
Will there be another tax-filing delay? Good question, and one that lots of folks are asking. My crystal ball, which I'll tell you upfront is bit cloudy after a year+ of COVID-19 tax changes, says probably not, despite grumbling (and more) about the May 17 move.
As mentioned earlier in this post, the IRS and particularly Rettig, had resisted changing the annual deadline from the usual mid-April day to, well, any later date for months.
Given that the federal lawmakers, tax professionals and their representative organizations and taxpayers who pushed for an automatic extension got just a one-month delay that is so limited in scope, it appears unlikely that the IRS will budge further.
I get the feeling that Rettig and the agency, like all of us struggling with the inconveniences of life during a pandemic, just want things (including taxes) to get back to as close to normal as soon as possible.
But then today at an appearance by Rettig before the House Ways and Means Oversight Subcommittee, one of the members of Congress who sought the filing delay applauded the IRS for changing the deadline move and said he "will be in discussion [with the agency] for future changes." That suggestion didn't go over well with at least one CPA.
We'll see. For now, though, mark your federal tax calendar for May 17. And good luck!
You also might find these items of interest:
- Paying self-employment taxes on the revised Schedule SE
- The child care tax credit is a good claim on 2020 taxes, even better for 2021 returns
- IRS tax-free unemployment guidance: don't amend returns if you've already filed; use new worksheet if you haven't
|Coronavirus Caveat & More Information
In 2021, we're still dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.
But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.