March, 2021   By Timothy Perry

The IRS has changed course and finally pushed back this year’s filing deadline considering all the recent legislation that will affect most American’s tax returns.

The Internal Revenue Service has pushed back the traditional April 15th tax-filing and payment deadlines for individuals until May 17th, 2021.  This came as a welcome bit of breathing room to both taxpayers and tax preparers during this particularly complicated tax season.

Accountants and other tax professionals lobbied lawmakers to join them in urging the government to extend the time in which people must complete and file their 2020 tax returns so they could adequately adapt to the various tax law changes born out of the COVID-19 pandemic. Many tax professionals just recently started to expand their office hours as more and more Americans got vaccinated. The problem is, unless they had a robust virtual strategy in place, they likely fell behind on the percent of clients they had completed returns for this year compared to this point in previous years. Both taxpayers and tax preparers contributed toward the delay in getting this year’s tax season kicked into high gear. This delay coupled with the tax law changes created a situation where an abundance of filers would have filed late or had to later file an amended return had something not been done.

The extension from April 15th to May 17th is automatic and applies to individual returns and payments for 2020 that are normally due April 15th. The roughly one-month extension temporarily waives penalties and interest. Beware, estimated-tax payments are still due on April 15th!  States typically follow the IRS’s lead and push their income tax filing deadlines back as well to avoid chaos and uncertainty. However, until each individual state makes an announcement, while likely, it is not a foregone conclusion they will follow suit.

The IRS had hoped in vain to resume a normal tax filing schedule in 2021 after a turbulent year of pandemic disruptions, job losses and tax-law changes in 2020. Instead, they eventually gave in to the building pressure to provide at least some amount of relief and granted additional time to taxpayers and tax professionals alike. Not surprisingly, many taxpayer advocates don’t think an additional month is enough, but it’s likely all we will get.