Has your tax year deadline been delayed, postponed or remained unchanged? Are you completely confused about what changes apply to you and which ones do not? If questions like this are keeping you up at night, you are not alone. The past year has been filled with so much uncertainty and as life is starting to return to whatever normal is, many of you are left in flux or just plain confusion. Let’s see if we can help sort things out a bit and take a closer look at the upcoming tax deadlines.
The changes addressed in the following almost exclusively apply to the individual filer with the exception of the areas affected by the winter storm in February (Texas, Louisiana and Oklahoma). Businesses were generally left out on any postponement to file and pay federal and state income tax, some exceptions may apply.
Federal Income Tax
Just mere weeks before the filing deadline for the 2020 tax year, the IRS announced that it would be extending the deadline to file and pay individual income tax to May 17th, 2021. This announcement did not include corporate, or partnership returns, and those dates remain unchanged. This deadline does not include Texas, Louisiana and Oklahoma. These areas were hit by a winter storm in February and the IRS announced that corporations, partnerships and individuals located in the affected areas will have until June 15th to file and pay.
On March 29th, 2021 the IRS sent out a subsequent bulletin stating that they are also postponing certain contribution allowance deadlines to May 17th, 2020. These include contributions to IRAs, Roth IRAs, health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs). While these extensions to file and pay returns are helpful, the lack of uniformity between state and federal declarations can cause confusion among taxpayers as to which dates apply to them.
State Income Tax
The assumption is that individual states would follow the lead of the IRS (because that is what usually happens) and move their state income tax deadlines to May 17th. as well. Unfortunately, while most states did indeed move their deadline, each state has chosen to do something different. Currently 41 states and D.C. have an individual income tax requirement. As it stands, here are the revised individual income tax deadlines:
The following states have extended their individual income tax deadline to 5/17/2021:
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
The remaining state deadlines are as follows:
- Iowa 6/1/2021
- Oklahoma 6/15/21
- Louisiana 7/15/21
- Maryland 7/15/21
Hawaii is the only state with an individual income tax not to extend their deadline.
Individual state details
As with the varying dates, it is extremely important to know what exactly is being delayed. For example, while the IRS and most states pushed the filing and payment deadline to May 17, Alabama extended the date to file your return but that does not include the payment of any tax due. Therefore, interest will accrue on any tax liability not paid by April 15th. Be sure to know what is included in your respective state(s).
What’s not included
As noted, the federal and most of the state deadline extensions apply to the individual filer, giving them additional time to file and pay. However, even though a small business owner may file an individual tax return and benefit from this extension, the estimated payments many owners are required to pay has not been extended and the first installment for 2021 is still expected on April 15th, 2021.
With various information coming from federal as well as state governments it’s extremely important to know what details and dates apply to you. Take comfort in knowing resources are available to ease your burden at tax time and throughout the year.
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Rick Bromund heads the tax research team at ComplYant, a technology platform offering business owners and entrepreneurs a simple way to manage tax rules and requirements. Rick is an experienced professional in the tax industry and has previously held positions at Fortune 500 companies as well as one of the big 4 accounting firms.