The IRS in News Release IR-2021-59[1] announced that the due date for individual tax returns originally due on April 15 has been pushed back to Monday, May 17.

What the Relief Applies To

In 2020 the IRS went through a few iterations of the extension of the due dates, beginning then with extending the date for paying taxes due on April 15 and then later finally relenting and pushing back the filing date as well.

This time the IRS has extended both the filing date and the payment date for individual returns (note there is no mention of other entity types) from April 15 to May 17 (May 15 falls on a Saturday, thus the IRS pushed the new due date to the following Monday). As the release provides:

The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.[2]

As well, the date when the payment of tax due on the individual returns is required is pushed back as well:

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.[3]

The IRS notes that taxpayers will not need to take any specific steps to obtain this extra month to file and pay:

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. 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 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15 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.[4]

The release quotes the IRS Commissioner when describing the justification for this extension:

“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,” said IRS Commissioner Chuck Rettig. “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.”[5]

However, Get That First Estimate for 2021 in by April 15

While the IRS grants relief for filing and paying tax on the 2020 return to May 15, the agency is not doing the same for the first 2021 estimated tax payment due on April 15:

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. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.[6]

As well, the release solely describes relief for the 2020 individual returns due on April 15, 2021. Thus, it appears that corporate returns filed on Form 1120, trust and estate income tax returns filed on Form 1041 and other returns due on April 15 will continue to be required to be filed by that date.

IRS Warns About State Income Tax Return Issues

The news release also warns taxpayers that the federal extension does not mean that their state income tax returns will also receive a deferral for filing and payment. The release states:

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.[7]

Special Rules for Louisiana, Oklahoma and Texas

The release also reminds taxpayers that additional due date relief is available to taxpayers in Louisiana, Oklahoma and Texas:

Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.[8]

More Guidance to Come

The release notes that “[t]he IRS will be providing formal guidance in the coming days.”[9] There remain a number of questions to be answered about how this program will work, including formally noting that such relief is being granted under the authority granted Treasury under IRC §7508A.

Finally, there’s a reasonable chance that more relief might be forthcoming. Last year the IRS started by offering narrow relief that kept expanding as we got closer to April 15. Thus, it’s not out of the question that estates, trusts and calendar year C corporations might be offered the same relief as we get closer to April 15. As well, the IRS likely will get numerous comments requesting that the estimated tax due date for individuals be pushed back a month as well.

[1] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021, https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline (retrieved March 17, 2021)

[2] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[3] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[4] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[5] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[6] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[7] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[8] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021

[9] “Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline,” IR-2021-59, March 17, 2021