Income taxes are due May 17. Here’s what to expect if you haven’t filed yet.
After a 32-day extension of the individual income tax filing deadline, tax day is upon those who have yet to file.
The IRS tax payment and filing deadline was extended to May 17, from its typical April 15 deadline without penalties and interest, regardless of the amount owed. The measure was taken to help Americans and tax payers navigate the COVID-19 pandemic.
“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig in a March 17 announcement of the extension.
Punctual families filing by the May 17 deadline are eligible to receive expanded benefits with passage of the American Rescue Plan in March. The expanded child tax credit will begin disbursements of $250 to $300 per child each month, totaling $3,000 to $3,600 starting on July 1, according to the nonprofit Humanity Forward.
“To determine how much money you’ll be receiving, the IRS needs to confirm your 2020 income,” said Greg Nasif, political director of Humanity Forward, in a news release. “If people don’t file before the deadline, they could end up receiving less than what they’re owed.”
People who typically do not earn above the required threshold for filing are eligible for the expanded child tax credit — but only if they file this year.
“Folks who typically don’t have to file their taxes are the ones who stand the most to benefit from the Child Tax Credit, said Nasif, referring to the millions of Americans who are below the $12,200 income threshold. “But they need to let the IRS know about their eligibility by filing this year.”
Individual Colorado taxpayers, both state and federal, who need additional time to file beyond the May 17 deadline can be granted a filing extension until Oct. 15, but that does not grant an extension of time to pay taxes due. Individual taxpayers should pay their income tax due by May 17 to avoid interest and penalties. Taxpayers can file IRS Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. and state tax filing can be extended through e-File. If you expect to get a refund this year but do not make the filing deadline, according to the Colorado Department of Revenue, you can still file your state income tax on or before October 15.
The IRS is taking steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before changes made by the American Rescue Plan. According to the U.S. Department of Labor, Office of Employment and Training, over 23 million U.S. workers nationwide filed for unemployment last year. For the first time, some self-employed workers qualified for unemployed benefits as well.
Samantha Galvin, an associate professor of the practice of taxation with the University of Denver Sturm College of Law, said the tax extension was a needed relief.
“The government was trying to be sensitive of people’s situations, realizing that everyone has had a rough year, that it might take them longer to get organized and get their paperwork in order,” Galvin said. “All those types of things.”
Galvin is also assistant director of the college’s Low Income Taxpayer Clinic. “We always have complex cases,” she said of the clinic. “They don’t necessarily involve this current year’s issues.”
In regard to individual taxpayers, in general, Galvin said: “People who are due refunds usually file early and people who owe wait for later.”
This year, like last year, volunteer and professional workers who prepare taxes were limited because of the pandemic. Many clients had to wait and typical past walk in services, prior to the pandemic, were now by appointment only.
This year’s extension, like last year’s, “helped some people figure out what their financial situation was looking like,” she said. “Early on it seemed like people were struggling to get appointments.”