Tax Day for Individuals Extended to May 17

After months of calls to extend the tax season, the IRS has now extended the April 15 tax deadline to May 17. The decision was due to the status of the ongoing pandemic and it’s lingering effect on businesses and taxpayers as well as changes that are included in the recently signed American Rescue Plan Act, which was signed into law on March 11. Included in that legislation was a retroactive exemption for a portion of unemployment compensation for some taxpayers in addition to the third round of stimulus payments. Part of the effort involved a group of bipartisan lawmakers, who, on behalf of taxpayers who have been anxious about the looming April 15 tax deadline, sent a letter to the IRS urging an extension of the deadline.

Federal income tax payments for the 2020 tax year that are due from individual taxpayers on or before April 15, 2021 can now be deferred to the extended May 17 deadline without penalties and interest, regardless of the amount owed. First quarter estimated tax payments are still due April 15.

Taxpayers should be aware however that penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021.

The one-month extension is expected to give taxpayers more time to get their finances in order and pay any taxes owed in connection with their 2020 tax returns. The move will also provide some relief for the IRS, where resources have had to be diverted to the processing of millions of stimulus checks under the American Rescue Plan.

Massachusetts and other states could also extend their deadlines but no announcement has yet been made. State filing and payment deadlines vary across different states and may not necessarily follow the federal filing deadline. Your team at Stone will continue to monitor developments as they occur. 

Stone & Company is a CPA firm based in Lexington, Massachusetts.

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