IRS Issues Guidance Around Extended Tax Filing Deadline

On March 17 the IRS announced an automatic postponement of the tax filing deadline from April 15 to May 17 “to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities.” On March 29, the IRS released official guidance in Notice 2021-21 which provides clarity on what IS covered and what is NOT covered by the due date extension and specifically notes that it does not provide additional time for estimated tax payments due April 15.

What’s Covered

Individual Taxpayers
Individuals filing a form in the Form 1040 series (1040-SR, 1040-NR, 1040-PR, 1040-SS, 1049(SP)), do not need to file any form (including elections, statements, schedules and forms which would be attached to forms in the Form 1040 series) or make any payment until May 17.
Form 1040-NR
Returns of foreign trusts and estates with federal income tax filing or payment obligations that file Form 1040-NR.
Contributions to IRAs and Roth IRAs
Making contributions to these retirement accounts for the 2020 tax year as well as reporting and paying the 10% additional tax on 2020 distributions from IRAs or workplace-based retirement plans.
Health and Education Accounts
Making contributions to health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs) and Coverdell education savings accounts (Coverdell ESAs).
2017 Refunds
Making refund claims for the 2017 tax year, which are normally due April 15. Taxpayers must properly address, mail, and ensure the refund claim (e.g., return) is postmarked on or before May 17, 2021.
Filing Deadline for Forms 5498
The due date for these forms relating to IRA Contribution Information has been moved to June 30, 2021.
Annual Filing Season Program
Applying to the Annual Filing Season Program (AFSP) for the calendar year 2021. Tax preparers now have until May 17 to apply to participate in the AFSP.

The IRS cautions that this extension does not apply to any other type of taxpayer or federal tax return.

What’s Not Covered

  • Trust Income Tax Returns
  • Corporation and Partnership Income Tax Returns
  • Estimated Tax Payments for 2021
  • Gift Tax Returns – while this is somewhat unclear in that gift tax returns without tax due normally extend with the filing of Form 4868, it is advisable to file a separate gift tax return extension at April 15 rather than relying on a Form 4868 filed after April 15 and before May 17.
  • Estate Tax Returns

Taxpayers do not have to file a separate extension to obtain relief under Notice 2021-21. The IRS will disregard the period beginning April 15, 2021, and ending on May 17, 2021, in calculating any interest, penalty or addition to tax for failure to file the federal income tax returns or to pay the federal income taxes postponed by the notice. The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

Note that with respect to estimated payments, a taxpayer may be able to manage cash flow by including with their 2020 extension payment on May 17 an amount sufficient to cover the 2021 estimated payment required and elect to credit the resulting overpayment on their 2020 return.

States such as Texas, Oklahoma and Louisiana that were designated as federal disaster areas had their filing deadline automatically extended to June 15.

State and Local Conformity

As of March 30, 2021, 35 states, including Ohio, have postponed the individual income tax filing deadline to conform to the May 17 federal deadline extension. The municipal due date for Ohio individual income tax is tied to the state, and therefore, is also postponed until May 17.

Ohio municipal net profits tax filings for businesses have not been postponed; however, several cities have issued guidance that they will honor the May 17 due date. Please check with your specific city on its applicable deadlines.

Ohio’s IRC Conformity legislation (SB 18) is still unpassed as of this publication. The conformity bill is important due to its ramification on the deductibility of Paycheck Protection Program expenses, which are currently taxable in Ohio, absent conformity.

BMF Advisors stand ready to assist with your unique situation and discuss the best course of action for you and your business.

About the Authors

John E. Jenkins
John E. Jenkins
CPA
Partner, Taxation Services
Mark A. Rossetti
Mark A. Rossetti
CMI
Senior Manager, State and Local Tax Services

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