The Internal Revenue Service has postponed the April 15 tax payment and filing deadline for individuals to May 17, allowing more time to file your 2020 Federal Form 1040 income tax return. California conforms to the federal change and many other states to follow the IRS lead. The recent $1.9 trillion COVID-19 relief bill signed into law earlier this month will mean some filers will have to wait for the updated Form 1040, resubmit their returns, or consult their tax advisers for advice if they have already filed their taxes. As part of the American Rescue Plan, among other provisions in the tax law, certain taxpayers are exempt from paying taxes up to $10,200 of unemployment benefits, and they may claim any missing $1,200 or $600 stimulus payments from the last year.
While we understand that this allows more time to get the tax returns completed, we will still need client data as soon as possible.
This extension is automatic and individual taxpayers do not need to file any forms to qualify for this federal and California state tax filing and payment relief. The IRS will be providing formal guidance in the coming days for other states.
Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868. Filing an extension of time to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
Keep in mind that this extension only applies to individuals and the relief does not currently apply for the following:
- 2021 First Quarter estimates are still due on April 15, 2021.
- Calendar year C-corporations return (Form 1120) and calendar year Trust returns (Form 1041) are still due on April 15, 2021.
We will continue to monitor developments and update you on the latest information. If you have questions about how this change can affect you, please don’t hesitate to contact us.