On 29 March 2021 the Internal Revenue Service (IRS) announced that individual taxpayers have until 17 May 2021 to meet certain deadlines that would normally fall on April 15 such as making Individual Retirement Account (IRA) contributions and filing certain claims for refund. The IRS also issued Notice 2021-21 that day which provides details on the additional tax deadlines that have been postponed until 17 May 2021 due to the ongoing COVID-19 pandemic and recent tax law changes. This follows an earlier announcement on 17 March 2021 when the IRS and the Treasury Department announced that the Federal income tax filing due date for individuals for the 2020 tax year would automatically be extended from 15 April 2021 to 17 May 2021. This extension also applies to the payment of any balance due shown on the 2020 tax return. The extended due date remains 15 October 2021 for tax returns originally due 15 April 2021.
The extension to 17 May 2021 is automatic and individuals will not need to file any additional forms to take advantage of the extended deadline. For taxpayers with unpaid balances, penalties, interest, and additions to tax will begin to accrue on 18 May 2021.
The relief applies only to individual income tax returns and balance due payments and does not apply to first quarter 2021 estimated tax payments. Individual first quarter 2021 estimated tax payments are still due 15 April 2021.
The extended filing and payment deadlines announced by the IRS and the Treasury Department only apply to the taxpayer’s individual Federal income tax return, not state filings or payments. Many states have conformed to the Federal extended filing and payment deadlines, and some have even extended beyond the 17 May 2021 Federal due date. In addition, for state tax returns without balances due, many states offer an automatic six-month extension of time to file. Taxpayers should review their state filing requirements on a state by state basis to ensure they are complying with their resident state and any nonresident state filing obligations they might have.
The extended Federal filing deadline outlined above also applies to Form 1040-NR (U.S. Nonresident Alien Income Tax Return) and Form 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts). With respect to Financial Crimes Enforcement Network (FinCEN) Form 114 (Report of Foreign Bank and Financial Accounts) which must be filed electronically on or before 15 April of the year following the calendar year being reported, the FinCEN automatically grants filers who fail to meet the annual due date of 15 April an automatic extension to 15 October. As a result, specific requests for this extension are not required. If a taxpayer fails to electronically file their FinCEN Form 114 by 15 April it is automatically extended to 15 October.
Donna Chamberlain
dchamberlain@bdo.com