Reference Material
Tax Season Extended to May 17, 2021
The IRS recently announced that they are extending the tax filing deadline from April 15 to May 17, 2021. This means that individuals have until May 17, 2021 to file and pay taxes. No penalties or interest will accrue until after May 17. However, the extension does not apply to estimated payments normally due April 15, 2021.
No guidance has been issued regarding whether states will follow suit and extend their deadlines as well.
American Rescue Plan
The American Rescue Plan was signed into law on March 11, 2021. While the bill contains many items, it specifically addresses several tax-related items that impact 2020 tax returns. Two of the most pressing items are that the first $10,200 of unemployment compensation received in 2020 will be treated as nontaxable income. While married couples filing a joint return may exclude up to $20,400 of unemployment compensation in total, the $10,200 limit will still apply for each spouse.
In addition to the retroactive treatment of unemployment compensation, another item that this new bill addresses is that advance premium tax credits for 2020 will not need to be repaid (within certain limits) on the 2020 tax return.
While guidance has been provided on how to properly report the unemployment compensation, guidance is still forthcoming on how to report the reconciliation of the advance premium tax credit or what to do for those people who have already filed returns prior to this being passed.
You can read the full text of the bill at the link below.
