The IRS has announced that it is moving the tax deadline for 2021 from April 15 to May 17, in light of ongoing disruption caused by the pandemic. The shift applies to both the filing date as well as the payment date, meaning that taxpayers can postpone federal income tax payments without penalties and interest, regardless of the amount owed. The shift applies specifically to individual taxpayers, who do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. However, this relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. The IRS also noted that this extension applies only to federal income taxes; state governments will set their own policies.
The position of the NYSSCPA is that this extension is too limited, leaving millions of vulnerable taxpayers without reprieve. The relief does not extend to small business owners and individuals who have estimated tax payments due on April 15. Other payments not included in the extension include trust income tax payments and return filings on Form 1041, as well as corporate income tax payments and return filings due April 15.
In the short term, the NYSSCPA will work with the New York state governor and the Department of Taxation and Finance to align state extension dates and procure guidance for our members. The Society will also continue to push for a joint federal and state tax deadline extension to June 15.
The AICPA has also
criticized the extent of the relief, pointing out that millions of small business owners and individuals who pay estimated taxes, as well as those who make trust income tax payments and return filings on Form 1041 or corporate income tax payments and return filings on various Forms 1120, will not benefit due to the narrowness of the relief.
“Americans, individuals and small businesses have been impacted immeasurably. The fact is virtually all aspects of the federal government and state and local governments have also been impacted. A fair assessment might conclude, for a variety of reasons, that the IRS has been affected more than other federal agencies. I believe taxpayers and practitioners understand this,” said AICPA CEO Barry Melancon. “It is commendable that the IRS wants to demonstrate a return to normalcy. However, the IRS, through no fault of their employees, is seeing significant backlogs, inundated phone lines, unopened mail by the millions and systems sending out unwarranted notices. Extending all tax returns due to June 15th exhibits an understanding of the IRS' impact on the American public.”
Nonetheless, the AICPA, in a
separate statement, defended the postponement against those who'd prefer it not happen at all. “Opponents of a deadline postponement fail to consider that while any taxpayer has the ability to file for an extension, the process can itself be unduly burdensome, said Melancon. “To claim there are no issues with retaining the April 15th filing and payment deadline does not reflect the taxpayers’ perspective. We must not minimize or trivialize the hardships of taxpayers and tax professionals or the urgent need for deferment from an arduous filing environment."
IRS Commissioner Charles Rettig said, "This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities. Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."
The IRS had been called upon to extend the deadline over the past few months by numerous parties, such as the House Ways and Means Committee (
multiple times in fact) as well as the
National Conference of CPA Practitioners and the
National Association of Tax Professionals.