Ylan Mui reports the IRS is extending the tax filing deadline from April 15 to May 17. She joins ‘Closing Bell’ to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
The IRS and Treasury Department will postpone the April 15 tax-filing deadline to May 17, the agencies announced Wednesday.
“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,” said IRS Commissioner Chuck Rettig in a statement.
In addition, taxpayers can also delay payment of any money owed the IRS until May 17. If payers still need more time to submit their returns, they can request an extension (but not taxes owed) until Oct. 15 by filing Form 4868.
The extended deadline applies only to federal income returns and taxes, meaning that taxpayers will need to check to see if due dates for state taxes have been changed. Not all states follow the same filing deadline as the federal government.
Estimated quarterly payments are still due on April 15.
The IRS will provide more guidance on the extended filing season in the coming days, the tax collector said.
Today’s move comes after calls to extend the tax season increased following the passage of the $1.9 trillion American Rescue Plan, which meant the agency was tasked with sending another round of stimulus payments while at the same time processing tax returns and refunds.
“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” said House Ways and Means Oversight Subcommittee Chairman Bill Pascrell Jr., D-N.J., and House Ways and Means Chairman Richard Neal, D-Mass., in a Wednesday statement. “Under titanic stress and strain, American taxpayers and tax preparers must have more time to file tax returns.”
The latest coronavirus relief bill, which was signed into law by President Joe Biden on March 11, in the middle of tax season, made a number of changes that added to an already complex filing year for many.
The bill made the first $10,200 of unemployment income, or $20,400 for married couples filing jointly, tax-free for filers with 2020 adjusted gross income of less than $150,000 (for both singles and couples).
It also expanded the child tax credit to $3,000 annually for children ages 6 to 17 and $3,600 per year for those under 6. Parents could start receiving a monthly portion of the credit as soon as this summer.
“May 17 is a lot better than April 15,” said Adam Markowitz, an enrolled agent with Howard L Markowitz PA CPA in Leesburg, Florida. “I still don’t think it solves all the problems, though.”
Accountants are still waiting on guidance from the IRS on several items that impact this tax season. On Thursday, IRS Commissioner Charles Rettig will give testimony in a hearing on the 2021 tax-filing season convened by the House Ways and Means Oversight Subcommittee.
Beyond the tax changes made by the latest Covid bill, filing a tax return is extra important this year as it’s the only way to recoup stimulus payments that you may be eligible for and didn’t receive.
If your circumstances changed, or you’re a non-filer, you need to file a tax return with the IRS and claim the recovery rebate credit to get the economic impact payments you were owed and make sure the agency has your information on file for any future payments.
“Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds,” said Rettig in a statement. “Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”
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