IRS and Illinois Provide Pandemic Relief for Individual Taxpayers for 2020 Tax Filings

The Internal Revenue Service (IRS) has indicated they are continuing to address hardships experienced by taxpayers related to the COVID-19 pandemic. The Treasury Department and IRS announced relief for individual taxpayers by extending the federal income tax filing due date for the 2020 tax year from April 15, 2021 to May 17, 2021.

Taxpayers who are owed refunds are urged to try to file as soon as possible. The IRS also indicated that filing electronically with direct deposit is the quickest way to get refunds and can also assist in getting stimulus payments to those still entitled to them.

Relief is also being provided related to federal income tax payments owed by individual taxpayers. These can now be postponed for the 2020 tax year from April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement also applies to individuals who pay self-employment tax. Penalties and interest will accrue on any remaining unpaid balances starting May 17, 2021.

This extension is automatic – no forms are needed to qualify. Anyone needing additional time to file beyond the May 17 deadline can request an extension by filing Form 4868, which gives taxpayers until October 15, 2021 to file their 2020 tax return. Filing this form does not grant an extension of time to pay taxes due.

Estimated Tax Payments for 2021

This relief does not apply to estimated tax payments for the 2021 tax year, which are still due April 15, 2021.

State Tax Returns

The federal tax filing deadline postponement to May 17, 2021 only applies to individual federal income returns and tax payments otherwise due April 15, 2021.

On March 18, 2021, the state of Illinois announced that it will be following the IRS’ action, similarly extending the individual taxpayer deadline to May 17, 2021 for filing returns and paying taxes owed to Illinois.

Again, the extension does not apply to estimated tax payments that are due on April 15th. These payments are still due on April 15 and can be based on either 100% of estimated or 90% of actual liability for 2021, or 100% of actual liabilities for 2019 or 2020.

Since other states may or may not be changing their individual filing deadlines, please reach out to your ECS professional for updated information on other state’s requirements.

Trust and Corporate Returns

The above relief applies only to individual federal tax returns. Trust and corporate federal tax returns normally due April 15, 2021 are still due by that date (unless a request for extension is submitted by April 15, 2021).

Find out more about ECS and how it can help your tax planning, visit www.ecsfinancial.com if you have any questions.

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About The Author - Kimberly Siegel, CPA, is a Tax Partner at ECS Financial Services, a CPA firm located in Northbrook, IL. She has worked in public accounting for more than 30 years, representing clients in business and personal income tax across a wide variety of industries. Kim’s areas of expertise include tax planning, multi-state tax compliance, and income tax audits, while managing multi-state sales tax compliance, conducts sales tax research, and represents clients in sales tax audits. She is also experienced in accounting and financial statement preparation and analysis.