On March 17, the Internal Revenue Service (IRS) announced that the 2020 federal income tax filing due date for individuals will be automatically extended from April 15 to May 17. We were told the IRS will be providing more formal guidance in the coming days which we have yet to see. But let’s take a look at what we do know for sure.
Does the Extended Due Date Apply to Everyone?
The extension only applies to individual returns for taxpayers who file an IRS Form 1040.
Do I Need to File an Extension?
The extended deadline requires no forms to file for the extension. It is automatic. However, if you need additional time to file beyond May 17, you may request a filing extension until October 15 by filing Form 4868. It’s important to note that this form does NOT grant an extension of the time to pay any taxes due. In order to avoid penalties, taxpayers must pay their federal income tax due by May 17.
Does the Delayed Deadline Allow Me Up Until May 17 to Pay My Income Taxes Owed?
Yes, this extended deadline applies to any income tax amount owed. After May 17, as noted above, any amounts owed but not paid will begin accruing interest and penalties. However, it does NOT apply to the 1st quarter estimated tax payment which is still due on April 15. Estimated tax payments are made quarterly by individuals whose income is not subject to income tax withholding, including investment income, self-employment income, rental income, etc.
When Are My 2020 IRA Contributions Due?
Because the normal due date for 2020 deductible IRA contributions is the earlier of the date you file your 2020 tax return or April 15, 2021 (and for non-deductible Roth contributions, it is April 15), it is presumed that the new filing deadline also means that it is the new deadline for making your 2020 IRA contributions as well. However, the IRS has not officially and specifically commented on that at this time. We await further guidance on IRA contribution deadlines.
What Is NOT Included In the Tax Deadline Extension?
The IRS due date for an individual’s 1st quarter estimated tax payment for 2021 is still due on or before April 15. As noted above, estimated tax payments are made quarterly by individuals whose income is not subject to income tax withholding, including investment income, self-employment income, rental income, etc.
While California did also adjust their filing deadline to May 17 to be consistent with the new IRS filing deadline, not all states have done so. For those of you living in states other than California, check with your state agency at https://www.taxadmin.org/state-tax-agencies.
Like the IRS, the California deadline extension does not apply to quarterly estimated tax payments. Like the Federal payments, California quarterly estimated tax payments for the first quarter are still due April 15.