This year has been a year of updated information and the guidance related to the 2020 return due date is no exception!

In mid-February 2021, NATP submitted a letter to IRS Commissioner Charles Rettig requesting his consideration of a filing extension to the 2021 tax season. In mid-March, the IRS announced an extension of the filing deadline, but not the first quarter estimated payment deadline. In early April, the IRS extended additional tax deadlines to May 17.

The Treasury Department and the IRS announced on March 17, 2021, that the federal income tax filing and payment due dates for individuals for the 2020 tax year is automatically extended to May 17, 2021 (from April 15, 2021). This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest, and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15.

Additionally, earlier this year, the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns, and make tax payments. This extension to May 17 does not affect the June deadline.

On April 7, 2021 the IRS announced other tax deadline extensions to May 17, 2021.

Keep in mind, states do not always comply with federal updates and may issue separate guidance. It would appear Hawaii is the only state (with an income tax) that has not delayed the return deadline. The recommendation would be to verify state filing information to ensure state compliance requirements are met.

Notice 2021-21 (released March 29, 2021) clarifies the extended due dates. A summary is provided below:

Item	Extended to
Form 1040 series (this applies to filing the schedules, returns and other forms that are filed as attachments to the Form 1040 series or must be filed by the due date of the Form 1040 series (i.e. Schedule H, Schedule SE, Form 8915-E, etc.)	May 17, 2021
Elections required to be made on a timely-filed Form 1040 series or attachment as long as they are filed on the form or attachment	On or before May 17, 2021
2020 contributions to Individual retirement arrangements (IRAs and Roth IRAs)	May 17, 2021
2020 contributions to health savings accounts (HSAs)	May 17, 2021
2020 contributions to Archer Medical Savings Accounts (Archer MSAs)	May 17, 2021
Coverdell education savings accounts (Coverdell ESAs)	May 17, 2021
Furnish and file Form 5498 series (applicable to financial institutions)	June 30, 2021
Report and pay the 10% additional tax on 2020 distributions from IRAs or workplace-based retirement plans	May 17, 2021
Claims for credits or refunds on Forms 1040 or 1040-X if the three-year period of limitations for filing such claims expires on or after April 15, 2021, and before May 17, 2021	May 17, 2021
Forms filed by individual or non-individual taxpayers who are filing forms outside the Form 1040 series (i.e. Form 709 (gift tax return)	April 15, 2021
2021 estimated income tax payment due April 15, 2021	April 15, 2021

As you can see, the relief is limited in scope when compared to the calendar year 2020 extension relief provided for by the IRS. If you remember a year ago, the 2019 income tax filing and payment deadlines for all taxpayers who file and pay their federal income taxes on April 15, 2020, was automatically extended until July 15, 2020. For 2019 returns, this relief applied to all individual returns, trusts, and corporations.

What does this mean for practitioners?

It means some returns have not been automatically extended. For example, the filing date for gift tax returns and the payment of gift tax has not been extended. If you have clients who will not be able to file a 2020 gift tax return by April 15, 2021, an income tax return extension request (Form 4868) or a separately filed gift tax return extension request (Form 8992) will need to be filed by April 15, 2021.

Also, there is no relief for the first installment of estimated tax. The payment of any income tax that might be due for 2020 is now due May 17, 2021, but the first installment of estimated tax for 2021 is still due April 15, 2021.

Some of you may be already thinking of extensions and a workaround for the first 2021 estimated tax payment. Many of our clients may be struggling and will not be able to make a first quarter estimated payment and practitioners are in the habit of applying an extension overpayment to the following years first quarters estimated tax payment.

For example, in pre-COVID years if we were extending taxpayer Tim’s tax return (2017) and it is estimated he owed $20,000 with his return, and had a $10,000 first quarter estimated payment (2018) due, we might have him pay $35,000 with the extension payment (2017) ($20,000 for the 2017 return, $10,000 first quarter 2018 estimate, and $5,000 rounding just in case we made a calculation error).

Pre-COVID, the filing extension and first quarter extension payment were due the same date – generally April 15. When we eventually file the 2017 return and there is an overpayment, the overpayment would be applied to the first quarter 2018 estimate.

Will practitioners be able apply to apply this strategy for 2020 with 2021 estimates?

If we file a 2020 extension for 2020 in May 2021, and make an extension overpayment payment, can we expect that overpayment to be applied to the first quarter 2021 estimated payment? The IRS has not issued any guidance on the subject specifically for the current year; however, it would appear this would not be allowed based on Rev. Rul. 84-58.

According to the Rev. Rul “For returns filed after Dec. 31, 1983, the Service will apply overpayments arising on or before the due date of a return against the first installment payment of the next year’s estimated tax, unless the taxpayer notifies the Service that the overpayment should be applied against another installment.”

The 2020 return is due May 17, 2021 and the first quarter estimate is due April 15, 2021. It would seem an overpayment from a return due in May would not be able to be applied to an installment due in April.

Finally, the extension relief the IRS granted only applies to individual filers and those businesses required to file the Form 5498 series. There has been no filing deadline extension for business entities, trusts and estates. We have not received any indication that an extension of the payment and filing deadlines for these entities will be extended for 2020.

The IRS may not have granted all the extended time frames one had hoped for. Hopefully the extended deadlines have helped some. Granted, the fact that the first quarter 2021 estimated payment due date has not been extended will impact some small businesses and their owners who are still dealing with the effects of the pandemic. With the April 15, 2021 deadline sneaking up, it remains to be seen if the IRS will extend the first quarter estimated payment date.