The Internal Revenue Service and the State of Illinois have officially moved the 2020 income tax filing deadline for individuals to May 17, 2021 from April 15, 2021. Individual taxpayers can also postpone Federal and Illinois income tax payments due for the 2020 tax year to May 17, 2021 without incurring additional penalties or interest.
While this is welcome news for some taxpayers, there are a number of concerns that this limited extension does not address. The IRS extension does not:
- Extend the time for paying first quarter estimated income taxes for the 2021 tax year. These payments remain due on April 15, 2021. It is difficult for taxpayers to determine the amount of the estimated tax required without, at least, a reasonable estimate of their 2020 tax situation. Without an extension of these payments, the filing extension to May 17, 2021 has minimal value for many taxpayers.
- Extend other tax filings and payments that are currently due on April 15, 2021, including:
• Federal and Illinois income tax filings and tax payments for the calendar year 2020 trust returns; and
• Federal and Illinois income tax filings and tax payments for the calendar year 2020 corporate returns.
The state and local tax authorities are not obligated to match the Federal extension either. While several states like Illinois have independently extended their due dates, the vast majority have not and we await separate guidance on a jurisdiction-by-jurisdiction basis.
We will keep you informed as additional guidance becomes available.
If you have questions or concerns regarding this Client Alert, please contact Frank Washelesky at [email protected] or your ORBA advisor.