Good news for taxpayers who may be feeling a bit overwhelmed with all the changes and disruptions brought about in their lives because of the Covid pandemic. Last-minute changes in the federal tax laws also contributed to the need for a delay.
The Treasury Department and Internal Revenue Service announced on Wednesday 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. In step with the change at the federal level, the State of California also quickly announced the change of its tax deadline to May 17, 2021, consistent with the federal deadline as well.
IRS Commissioner Chuck 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,”
The IRS is still urging taxpayers to file as early as possible and encourages everyone, especially those who are owed refunds, to file electronically with direct deposit, which is the quickest way to get refunds. Most tax refunds associated with e-filed returns are issued within 21 days. It can also help some taxpayers receive any remaining stimulus payments they may be entitled to more quickly.
This relief does not apply to estimated tax payments that are due on April 15, 2021. 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.
Last minute changes to the tax season were made in the recently passed $1.9 trillion stimulus bill signed by President. The tax extension was also needed by the IRS as it has been given the large task of processing the third round of direct stimulus payments to all eligible households and individuals in the country.