The recent news that the Treasury Department and Internal Revenue Service have extended the upcoming tax filing deadline continues to cause confusion for many people. Therefore, we are posting this important update to help provide more clarity.
- The deadline for filing individual tax returns (forms 1040/540) has been automatically extended from April 15, 2021 to May 17, 2021.
- Tax payments for the 2020 tax year previously due on April 15, 2021 have also been automatically extended to May 17, 2021 without penalties and interest, regardless of the amount. Penalties, and interest will begin to accrue on any remaining unpaid balance as of May 17, 2021.
- Individuals do not need to file any forms to qualify for this automatic extension if their return is filed and taxes are paid by May 17, 2021.
- This relief DOES NOT APPLY TO ESTIMATED TAX PAYMENTS for 2021. The 2021 first quarter estimated tax payment is still due by April 15, 2021.
- California has conformed with all of the above deadlines.
- This automatic extension only applies to individual returns and does not apply to trusts, or corporations.
- California PPP loan update – California has not yet conformed with Federal laws for treatment of PPP funds which means currently expenses used to qualify businesses for loan forgiveness are not deductible on California returns. Therefore, we continue to recommend extending any return effected by a PPP loan until California releases further guidance. We are monitoring the situation closely and will follow up with our business clients as soon as a decision has been made.
As always, please do not hesitate to contact the HW partner or team member you work with for assistance or with any questions you may have.