- The IRS delayed the tax-filing deadline until May 17.
- This delay gives taxpayers an extra 30 days to file 2020 returns and pay any federal taxes owed.
- Read more about how the American Rescue Plan may affect your taxes this year.
The deadline to file your 2020 tax returns has been extended until May 17, the IRS announced Wednesday.
This means you’ll have an extra month not only to file your return but to submit any federal tax payments you owe, too. Bloomberg News first broke the news early Wednesday afternoon.
Here’s what you need to know about the change:
What Does This Mean for You?
If you haven’t filed yet, this delay means you’ll get a little extra time to ensure your return is accurate and new provisions are accounted for — reducing the likelihood you’ll need to file an amended return later on. This could be particularly helpful for people who will claim new unemployment income tax exemptions, after the IRS encouraged people to wait to file until it offers further guidance on the changes brought about by the latest unemployment and stimulus bill that passed last week.
The IRS has already begun issuing the latest round of $1,400 stimulus checks, so if you haven’t filed your 2020 return yet, this delay won’t change anything about how or when you receive your stimulus. You’ll be issued payment based on your 2019 tax return; whether it comes by direct deposit, mail, or debit card may depend on whether your banking information from that year is up-to-date.
Use the IRS’ Get My Payment tool for more information on your individual payment.
This change only applies to your federal tax returns. You may still be required to pay state income taxes and file a return by the standard deadline. Check your state tax agency’s website for details about your tax return.
Why Delay Tax Season?
It’s been a busy year for the IRS.
Amid rolling out a second round of stimulus payments early this year, the IRS delayed 2020 filing to Feb. 12 from its typical January start. Since that late start, taxpayers and tax pros alike have struggled to navigate broad and complex tax changes under the CARES Act and other federal programs, alongside unforeseen changes to individual circumstances — such as first-time unemployment claims, or figuring out how to file in multiple states.
And most recently, the passage last week of the American Rescue Plan complicated things even further. A third round of stimulus payments, new exemptions for those who claimed unemployment in 2020, expanded Child Tax Credits, and more must now be accounted for.
Already, the number of tax returns filed lags by 25% and the number of processed returns is down by 31% compared to this time last year, the IRS recently reported to the House Ways and Means Committee.
What Should You Do Right Now?
Continue to gather any tax documents you have and stay alert for further guidance from the IRS.
If you expect a refund after filing your 2020 return and you have all the information required to file, it’s still best practice to file sooner rather than later. This is especially true if you’re counting on your refund quickly, as the agency’s backlog of unprocessed returns grows. Since the start of tax season, the IRS has advised those expecting a refund to file electronically and submit direct deposit information for the fastest return.
Depending on how the latest stimulus affects you, you may want to wait to file if you typically use online software such as H&R Block or TurboTax. These companies are still waiting on IRS guidance to update their systems and account for changes in the latest stimulus.
If you meet with a tax professional to file your return and you haven’t already made an appointment, do it as quickly as possible. While the one-month delay does buy a bit of time, many tax pros will still be extremely busy — or even completely booked — through the new deadline.
If you have already filed your tax return, you may not need to take any further action. However, you should take stock of any new changes (or issues with your return) and determine whether you need to file an amended return to get any new aid or relief you now qualify for. Depending on when you filed your 2020 return, the new stimulus payment may be based on that return.
You can also consider filing for an extension with the IRS as the new deadline approaches if you have an especially complicated return. This doesn’t let you off the hook for payment — you’ll need to estimate your payment and submit that before the tax deadline — but can give you more time to file your tax documentation.
More 2021 Tax Resources:
- 7 Things to Know About This Year’s New Tax Rules
- New Unemployment Benefits, Stimulus Signed Into Law
- How to Claim the Unemployment Tax Break
- Yes, Your Unemployment Benefits Are Taxable. Here’s How Much You’ll Owe
- If You Donated to Charity in 2020, Make Sure You Claim This Tax Deduction