IRS Issues Guidance for the 2020 Federal Income Tax Deadline Extension

Last March 17, 2021, the United States Treasury Department and Internal Revenue Service announced the automatic extension of the deadline for the 2020 federal income tax filing and payment due date for individuals, from April 15, 2021, to May 17, 2021, due to the ongoing coronavirus pandemic.

To that effect, the IRS issued Notice 2021 of March 29, 2021, to provide taxpayers the guidelines on this relief and details on additional tax deadlines. The following summarizes some of the IRS guidelines on the 2020 federal income tax returns and payments postponement. 

2020 Federal Income Tax Returns and Payments

Any individual, foreign trust, and estate with a federal income tax return filed for the tax year 2020, on Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, Form 1040-SS, or Form 1040(SP) (Form 1040 series) with an original due date of Abril 15, 2021, is automatically postponed to May 17, 2021.

Taxpayers can also postpone federal income tax payments reported on one of these forms 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.  Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17. Penalties, interest, and additions to tax will begin to accrue on May 18, 2021.

Individual taxpayers do not need to file any forms for this automatic federal tax filing and payment relief. Businesses and any other type of taxpayer who files federal income tax returns on a format other than the Form 1040 series will not benefit from this extension. 

Any individual who requires additional time beyond the May 17 deadline can request a filing extension until October 15, by filing IRS Form 4868. While this form gives taxpayers until October 15 to file their 2020 tax return, it does not grant an extension of time to pay taxes due. Taxpayers should pay the U.S. income tax owed by May 17, 2021, to avoid interest and penalties.

2020 IRAs and Health Savings Accounts Contributions

The postponement of the due date for filing the 2020 federal income tax returns to May 17, 2021, also automatically extends to May 17, 2021, the time individuals can make 2020 contributions to their:

  • Individual retirement arrangements (IRAs)
  • Health savings accounts
  • Archer medical savings accounts
  • Coverdell education savings accounts

Furthermore, the deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021.

2021 Estimated Tax Payment

The due date for the 2021 estimated tax payments was not extended under Notice 2021-21. Therefore, the estimated tax payment for Q1 of 2021 is still due on April 15.

For more information or to receive an orientation by one of our tax advisors, please call (787) 751-6164, or email us at [email protected].