May 17 IRS Filing Deadline Extension Applies to Tax Returns and Important International Information Returns and Other Forms
On March 17, the Internal Revenue Service (the “IRS”) extended the tax filing deadline for individuals (see IR-2021-59, March 17, 2021). For the 2020 tax year, the normal tax day of April 15 for individuals was deferred till May 17, 2021. Notably, the tax payment deadline was also extended till May 17. No affirmative action is required by taxpayers, such as, for example, filing with the IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The extension applies automatically.
Taxpayers wishing to further extend the tax filing deadline beyond May 17, will need to file Form 4868 with the IRS. Importantly, such taxpayers would only get until October 15 to file their taxes (in other words, a regular six-month extension gets cut short).
In its March 17 announcement, the IRS did not specifically include any of the forms or schedules that are typically attached to a tax return among the items that got extended. But the IRS indicated that it would provide further guidance in that respect.
Not unexpectedly and consistent with sound tax administration practices, on March 30, the IRS issued Notice 2021-21 in which it provided the important confirmation that the extension relief applies to all schedules, returns, and other forms that are filed as attachments to the Form 1040 series or are required to be filed by the due date of the Form 1040 series. The Notice specifically notes the following forms:
- Schedule H, Household Employment Taxes;
- Schedule SE, Self-Employment Tax;
- Form 965-A, Individual Report of Net 965 Tax Liability;
- Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts;
- Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts;
- Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations;
- Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund;
- Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs);
- Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships;
- Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments;
- Form 8938, Statement of Specified Foreign Financial Assets.
Please visit our website for key international tax reporting forms and applicable tax filing deadlines, based on form and category of taxpayer (for example, U.S. residents vs. nonresident individuals or U.S. domestic business entities vs. foreign business entities) – US Tax Filing Deadlines and Important Dates -2020 Tax Season
Interestingly, the Notice applies only to “Affected Taxpayers.” However, according to the IRS, an Affected Taxpayer is “any person with a Federal income tax return filed on Form 1040, Form 1040-SR, Form 1040-NR, Form 1040-PR, Form 1040-SS, or Form 1040 (SP) (Form 1040 series), or a Federal income tax payment reported on one of these forms, that absent this notice would be due April 15, 2021, is affected by the COVID-19 emergency for purposes of the relief …” As such, pretty much any individual with an April 15 tax filing deadline is “affected” by the Notice. LIkely, the new term “Affected Taxpayer” is primarily relevant for purposes of ease of reference in the Notice (the defined term does not seem to have any special meaning otherwise).
The Notice also clarified that any elections that are normally due by April 15 (provided that they are made or required to be made on a timely filed Form 1040 series (or attachment to such form), are extended till May 17.
U.S. expats (U.S. citizens and Green card holders) living and working in Canada or otherwise outside the United States still have till June 15 to file their 2020 U.S. taxes. The good news is that if any tax is due, it would be due on or before May 17 (compared to April 15) and, if not paid, interest would start accruing from May 17 extended deadline.
The May 17 extended filing deadline also applies to claims for credit or refund and for taxpayers who want to make contributions to their individual retirement arrangements (IRAs and Roth IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs). Equally, the extended May 17 deadline applies to reporting and payment of 10-percent additional tax on amounts includible in gross income from 2020 distributions from IRAs or workplace-based retirement plans.
Form 5498 series filing deadline got extended to June 30, 2021.
It is unclear why the IRS would not extend the tax filing deadline for all taxpayers, such as corporations. It is also unclear why the IRS would equally fail to extend the tax filing deadline for March 15 taxpayers (pass-through entities and foreign trusts, primarily) – maybe because by the time the issue was raised, the March 15 tax filing deadline had passed. It would have helped if the IRS made a decision to extend filing deadlines early in the year and applied it consistently to all categories of taxpayers, like they did it for the 2019 tax year filings (the tax filing deadline was extended to July 15, 2020 last year – notably, not for pass-through entities and foreign trusts – they were left out).