March 30, 2021 IRS extends more tax deadlines for individuals, clarifies earlier announcement In Notice 2021-21 (released March 29, 2021), the IRS automatically extended until May 17, 2021, certain deadlines for individual taxpayers. Earlier in March the IRS announced the automatic extension until May 17, 2021, for individuals to file Form 1040 and pay federal income taxes without penalties or interest for the 2020 tax year (see Tax Alert 2021-0586). In that announcement, the IRS said it would issue formal guidance. In Notice 2021-21, the IRS clarifies the extended due dates. Specifically, the May 17, 2021 extension applies to: (1) filing federal income tax returns in the Form 1040 series and (2) making federal income tax payments in connection with one of these forms having an original due date of April 15, 2021. This relief applies to filing the schedules, returns, and other forms that are filed as attachments to the Form 1040 series or must be filed by the due date of the Form 1040 series (for example, Schedule H and Schedule SE, as well as Forms 965-A, 3520, 5329, 5471, 8621, 8858, 8865, 8915-E and 8938). The extension also includes elections required to be made on a timely-filed Form 1040 series (or attachment) as long as they are filed on the form or attachment on or before May 17, 2021. The Notice also automatically postpones until May 17, 2021, the deadline for making 2020 contributions to:
In addition, Notice 2021-21 postpones until June 30, 2021, the due date for financial institutions to furnish and file the Form 5498 series for these accounts. The postponement also includes the time for reporting and paying the 10% additional tax on 2020 distributions from IRAs or workplace-based retirement plans. Individuals also have until May 17, 2021, to file claims for credits or refunds on Forms 1040 or 1040-X if the three-year period of limitations for filing such claims expires on or after April 15, 2021, and before May 17, 2021. The IRS stated that this relief does not apply to individual or non-individual taxpayers who are filing forms outside the Form 1040 series (e.g., Form 709 (gift tax return)). The IRS also reiterated that there is no extension for estimated 2021 income tax payments due April 15, 2021. Implications Affected taxpayers may benefit from the limited relief in Notice 2021-21. Financial institutions should consider how this relief will affect their operations. This relief is very limited in scope compared to the extensions provided by the IRS for calendar year 2020, which were broadly postponed until July 15, 2020. For example, the filing date for gift tax returns and the payment of gift tax has not been extended. Thus, if taxpayers intend to extend their gift tax returns, they should either file an income tax return extension request (on Form 4868) or separately file a gift tax return extension request (on Form 8892) by April 15, 2021. The relief also does not extend the time for making the first installment of estimated tax, which was extended for calendar year 2020. Thus, while payment of any income tax that might be due for 2020 is not due until May 17, 2021, the first installment of estimated tax for 2021 is still due April 15, 2021. Lastly, the relief applies only to individual taxpayers and filers of the Form 5498 series. Filing deadlines for business entities, trusts and estates have not been extended, except for the Form 5498 series. The IRS has given no indication that extensions of filing and payment deadlines for these entities will be extended for the 2020 tax year. ———————————————
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
