Federal Income Tax Extension Could Create Confusion Over Tax Due Dates
On March 21, 2021, the Treasury Department and the Internal Revenue Service announced an extension of the federal income tax filing and payment due dates for individuals from April 15, 2021, to May 17, 2021. Because this extension applies to both the deadline for filing individual income tax returns, as well as for making individual federal income tax payments, for the 2020 tax year, any penalties, interest, or addition to tax that otherwise would have been imposed commencing as of April 15, 2021, also will be delayed until May 17, 2021.
Other Tax Filings Not Extended
The announced postponement of 2020 income taxes applies to individual taxpayers, including individuals who pay self-employment tax. This automatic extension, however, does not apply to other types of taxes or other types of tax filers.
The first quarterly estimated tax payment for the 2021 tax year from an individual required to make such a quarterly estimated tax payment remains due on April 15, 2021. Individuals also continue to be required to file any gift tax returns for gifts made during the 2020 tax year by April 15, 2021, along with payments of any applicable gift and generation-skipping tax.
In addition, the extension does not apply to income tax returns for the 2020 tax year filed by non-individual taxpayers, such as partnerships and S corporations (generally due March 15, 2021), C corporations, trusts and estates (generally due April 15, 2021), and tax-exempt organizations (generally due May 17, 2021).
State Income Tax Filings May Not Be Extended
An extension of federal income tax filings obligations does not necessarily extend the due date for state income tax filings. While the state income tax filing and payment due date deadline for the 2020 tax year has been extended for individuals by the Illinois, Indiana, and Minnesota governors, no similar announcement has been made for Ohio* or many other states.
We recommend that taxpayers consult immediately with their tax advisors about the due dates for upcoming tax returns and any extensions of the time to file and, if applicable, to pay. The 2021 tax extensions are different in certain respects from those granted in 2020, and will not benefit every taxpayer who expects to receive automatic extension relief or who benefited from tax extensions granted in 2020.
*Update: On March 24, the state of Ohio announced an extension of the individual tax deadline to May 17, 2021.
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