The IRS plans to delay the usual April 15 tax filing deadline to May 17, giving taxpayers some breathing room in an unusually chaotic filing season.
Accountants had asked the tax authorities to extend the deadline given the ongoing challenges of the corona pandemic for taxpayers and the IRS, which is still struggling with a backlog of tax returns from last year. The delay in the tax term was first reported by Bloomberg News.
The Treasury and the IRS confirmed late Wednesday that the tax filing deadline would be delayed to May 17. The deadline for tax payments – such as quarterly self-employment taxes or underpaid tax amounts – will also be pushed back to May 17.
The American Institute of CPAs had this week urged the IRS to delay the filing deadline, citing the impact of the pandemic on U.S. taxpayers and on the tax authorities themselves, which are still trying to work out a backlog of returns of the last tax. filing season. Lawmakers on Wednesday praised the tax authorities for the extension, calling it “absolutely necessary.”
“The practitioners have said, ‘We are here, but there are not enough hours in the day to get everything done in front of us,'” said Meredith Tucker, tax director at accounting firm Kaufman Rossin. “It’s hard to think we’ll be in tax season for another month, but we need more time.”
Tax preparers have reviewed changes to the tax code, including last week’s $ 1.9 trillion American rescue plan, which will affect problems ranging from taxes on unemployment benefits to the Child Tax Credit, as well as loans from the Paycheck Protection Program.
The extra time applies to individual taxpayers, including those who pay self-employed taxes, such as sole proprietors and gig economy workers, the IRS said. It added that individual taxpayers do not have to file forms or call the IRS to be eligible before the May 17 deadline.
Given earlier tax seasons, it’s likely that half of taxpayers have yet to file their returns, said Curtis Campbell, TaxAct president. He added that even with the extra breathing room, taxpayers still need to plan on getting their return to the tax authorities sooner rather than later.
“I would recommend that people file a file as soon as possible, especially if they need their tax refund,” Campbell said. “The IRS is committed to helping consumers deliver quickly, and by providing them with the most recent updated information, tax bearers can receive their returns and potential other future economic payments more quickly.”
Lawmakers welcomed the IRS’s decision to move the deadline.
“This extension is imperative to give Americans the flexibility they need in a time of unprecedented crisis,” said Representatives Bill Pascrell, Jr., a New Jersey Democrat and chair of the House Ways and Means Subcommittee on Oversight, and Richard Neal, a Democrat from Massachusetts, in a joint statement. “Under tremendous stress and strain, US taxpayers and taxpayers should have more time to file tax returns.”
At the same time, the IRS is tasked with splitting millions of federal stimulus payments on top of processing a backlog of filings. Last year, the agency switched to remote working due to the pandemic, forcing them to store paper tax returns in trailers until they could access them.
“Even the IRS – facing a significant backlog in mail processing, a delayed start to the 2021 tax season, flooded phone lines and another round of COVID-19 support payments – is overwhelmed,” the AICPA said.