17153: Anticipated Software Changes Due to Extended Filing Season

The IRS has implemented plans for the extended federal income tax filing deadline for individual returns. Deadlines for other return types were not affected (other than those previously announced for the winter storms in some states (see below)). Other states are determining whether or not to conform to the federal changes. 

Per IRS QuickAlert 4/22/21: "[The IRS] identified a delay in processing Form 1040 balance due, Form 1040-X amended, and Form 1040-ES estimated tax payment requests submitted via Modernized e-File. The issue has been resolved, and pending payments are being processed. The taxpayer's account will be credited with the original requested payment date(s). Taxpayers should not re-submit these payments."

Federal 1040 - All Filers

• Filing due date – 5/17/2021
• Payment due date – 5/17/2021
• Default payment withdrawal date for electronic funds withdrawal – none. You must enter a requested payment date on the PMT screen to clear EF message 2522.
• 4/1/21-- IRS adjusted the business rules to allow requested payment dates for electronic funds withdrawal beyond 4/15.
• An update to Drake20, released 4/2/21, allows a requested payment date up until May 17, 2021 for the 1040 main form.
• EF message 5299 now only generates if a date after 5/17/21 is entered on the PMT screen.
• Extension due date – 5/17/2021
• Default extension payment withdrawal date for electronic funds withdrawal – none. You must enter a requested payment date on the PMT screen to clear EF message 2522.
• 4/1/21-- IRS adjusted the business rules to allow requested payment dates for electronic funds withdrawal beyond 4/15.
  
• An update to Drake20, released 4/2/21, allows a requested payment date up until May 17, 2021 for the 1040 extension.
• EF message 5299 now only generates if a date after 5/17/21 is entered on the PMT screen. 
• 1^st quarter estimate date – 4/15/2021
• 1^st quarter estimate payment withdrawal date for electronic funds withdrawal – 4/15/2021

Combining the 1^st and 2^nd quarter amounts and including the total as the 2^nd quarter amount will allow you to pay 1^st and 2^nd quarter estimates electronically after April 15^th, however, the first quarter estimate for these filers may be considered late as it was due by April 15^th.

1040 filers in LA, OK, and TX affected by the February winter storms

• Filing due date – 6/15/2021
• Payment due date – 6/15/2021
• Default payment withdrawal date for electronic funds withdrawal – none. You must enter a requested payment date on the PMT screen to clear EF message 2522.
• 4/1/21-- IRS adjusted the business rules to allow requested payment dates for electronic funds withdrawal beyond 4/15.
  
• An update to Drake20, released 4/2/21, allows a requested payment date up until May 17, 2021.
• If the payment needs to be made after 5/17/21, the payment must be arranged outside of Drake Tax. 
• Extension due date – 6/15/2021 Note that the extension will have to be paper-filed if submitted after 5/17/2021. 
• Default extension payment withdrawal date for electronic funds withdrawal – none. You must enter a requested payment date on the PMT screen to clear EF message 2522.
• 4/1/21-- IRS adjusted the business rules to allow requested payment dates for electronic funds withdrawal beyond 4/15.
• An update to Drake20, released 4/2/21, allows a requested payment date up until May 17, 2021.
• If the payment needs to be made after 5/17/21, payment must be arranged outside of Drake Tax.
• 1^st quarter estimate date – 6/15/2021
• 1^st quarter estimate payment withdrawal date for electronic funds withdrawal – 4/15/2021
• IRS is not adjusting business rules to allow the 1^st quarter estimate to be electronically withdrawn on 6/15. Combining 1^st and 2^nd quarter amounts and including the total as the 2^nd quarter amount will allow them to pay 1^st and 2^nd quarter estimates electronically.

1120, 1120s, 1065, 1041, 990, and 706 returns due after February 11, 2021 and before June 15, 2021 for filers in LA, OK, and TX affected by the February winter storms

Important: Due dates did not change for any other package except for filers in LA, OK, and TX affected by the February winter storms.  Those changes are as follows:

• Filing due date – 6/15/2021
• Payment due date – 6/15/2021
• Default payment withdrawal date for electronic funds withdrawal – original due date of return  
• IRS is not adjusting business rules to allow requested payment dates for electronic funds withdrawal beyond the original due date for these filers. They will not be able to schedule future payments after the original deadline up to 6/15. If they are filing after the original due date, electronic funds withdrawal will have to be made the date they file or an alternate payment method must be used.
• 1^st quarter estimate date – 6/15/2021
• Extension due date – 6/15/2021 Note that the extension will have to be paper-filed if submitted after the original due date of the return. 
• Default extension payment withdrawal date for electronic funds withdrawal – 4/15/2021
• IRS is not adjusting business rules to allow requested payment dates for electronic funds withdrawal beyond the original due date for these filers. They will not be able to schedule future payments after the original deadline. Extensions filed after the original due date will have to be paper-filed.    

Additional Extensions (COVID Tax Tip 2021-45 4/7/21)

Contributions to IRAs and health savings accounts

People now automatically have until May 17, 2021, to make 2020 contributions to their:

• Individual retirement arrangements
• Health savings accounts
• Archer medical savings accounts
• Coverdell education savings accounts

The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021. Lastly, the due date for Form 5498 series returns related to these accounts is now June 30, 2021,

2017 unclaimed refunds The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021. To get the unclaimed refund, a taxpayer must properly address and mail the tax return, postmarked by May 17, 2021. If a taxpayer doesn’t file a return within three years, the money becomes property of the U.S. Treasury.

Foreign trusts and estates Foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021.

2021 Annual Filing Season Program application deadline Tax return preparers who’d like to participate in the Annual Filing Season Program for calendar year 2021 now have until May 17, 2021, to file their application with the IRS.

No extension for estimated tax payments April 15, 2021 is still the deadline to make first quarter estimated tax payments. Withholding is automatic for most employees, but some taxpayers’ income isn't subject to income tax withholding. These taxpayers must generally make quarterly estimated tax payments. Income that may require estimated tax payments includes:

• Self-employment
• Interest
• Dividends
• Alimony
• Rentals