The renewal comes after an intense year for the chronically underfunded IRS, including a late start to the filing season and relief checks being paid out.
WASHINGTON – Americans will be given extra time to prepare their taxes. The Internal Revenue Service says it is delaying traditional tax returns from April 15th to May 17th. The IRS announced the decision on Wednesday and said it would provide further guidance in the coming days. The move gives taxpayers and the IRS more leeway to cope with the changes brought on by the pandemic.
“The IRS would like to continue doing everything possible to help taxpayers cope with the unusual circumstances surrounding the pandemic while working on important tax administration tasks,” IRS Commissioner Chuck Rettig said in a statement.
The decision is postponing when individual taxpayers must file their tax returns and when their payment is due. The IRS said taxpayers who owe money would not receive any further penalties or interest if they paid by May 17. The new deadline also applies to people who pay a self-employment tax.
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Taxpayers do not need to take any action to take advantage of the new deadline. If you need more time after May 17th, you can apply for an extension until October 15th.
The new deadline does not apply to estimated tax payments due on April 15th. these remain due until this day.
The decision to extend the deadline comes after an intense year for the chronically underfunded IRS. The pandemic hit mid-way through last year’s tax filing season and reset the agency on processing. The IRS has also been a major player in the distribution of government aid payments and is currently helping with the dispatch of the third round of payments in the middle of the current tax filing season.
In addition, the extension gives the IRS time to issue guidance on recent tax law changes. The American bailout plan excludes the first $ 10,200 of unemployment benefits from federal taxes for those earning less than $ 150,000.
“Never before has the law changed so much in the middle of the tax return,” Patrick Thomas, director of the Tax Clinic at Notre Dame Law School, said in a statement.
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The IRS must issue guidance to both taxpayers and accountants as millions of filings are unlikely to take this change into account.
A number of lawmakers and tax community professionals have pushed for the tax filing season to be extended to meet this pressure. The House Ways and Means Committee welcomed the move.
“This expansion is absolutely necessary to give Americans the flexibility they need in a time of unprecedented crisis,” said Chairman Richard Neal, D-Mass., And Rep. Bill Pascrell Jr., DN.J., Chairman of the Supervisory Subcommittee of the Committee.
Rettig is expected to speak to the committee tomorrow about how the IRS is managing this filing season and the importance of this extension.
The IRS continues to urge people to apply as soon as possible, especially those who are owed refunds. In some cases, filing will help taxpayers get the remaining relief payments they are entitled to more quickly.
Bloomberg and CNBC were among the first to report the delay.