The Federal Tax Deadline Extension: What You Need to Know

On March 17, the IRS gave Americans a break: It extended the deadline for filing income taxes to May 17 to “help taxpayers navigate the unusual circumstances related to the pandemic.”

Some people will welcome the extension as a way to help them address some of those unusual circumstances, such as accounting for a government stimulus check, losses in income due to job disruptions, and other variables. Others will see it as an extension on their usual procrastination and simply push back their last-minute scramble.

Either way, here are some things you need to know about the extension:

You don’t have to pay taxes until the deadline. In typical years, if you file for a tax return extension, you still are responsible for paying your federal income tax payment by the April 15 deadline (or pay penalties and interest). This year, however, nothing is due until May 17 UNLESS you make estimated tax payments. Those are due according to the usual schedule.

You also get an extension for contributing to IRAs and HSAs. Because the deadline for contributing to your retirement plan and health savings accounts are aligned with the federal tax deadline, you also can put off those contributions.

You can request a refund back to 2017. You have up to three years to request refunds for each tax year, but you usually have to make those requests by April 15. This year, you have until May 17 to request refunds for 2017 and after.

State deadlines might have already passed. States are not required to align their tax deadlines to the federal deadlines, so some states might have held to the April deadline.

You could get an extension on the extension. Just as in any other tax year, you can file an extension for this year’s taxes, but remember that you are still responsible for paying any taxes due. In other words, a typical extension doesn’t extend the deadline for paying your taxes, only
for filing the paperwork.

The extended deadline isn’t extended. If you file for an extension on May 17, you will still be required to file your taxes by the usual annual extended date of Oct. 15.

You don’t have to wait. Of course, you don’t have to wait until the deadline to file your taxes, and filing them sooner will mean getting a refund sooner, if you’re expecting one.

Download May’s Full Newsletter Here