Congressional Tax Writers Cheer IRS Delaying Deadline for Current Tax Season to May 17

The Internal Revenue Service on Wednesday delayed the April 15 tax filing deadline to May 17, according to the House Ways and Means Committee.

“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” said House Ways and Means Chairman Richard Neal (D-Mass.) and Oversight Subcommittee Chairman Bill Pascrell (D-N.J.) in a joint statement.

The postponement comes after lawmakers and accounting organizations have made repeated calls for IRS Commissioner Charles Rettig to delay the filing deadline.

It also comes as the IRS has fallen behind schedule from prior tax seasons. The agency began the current tax filing season on February 12, 2021, nearly three weeks later than usual. Since then, the agency has processed 31% fewer tax returns and approximately 3 out of every 4 taxpayers trying to reach the IRS have been unable to get help, as of the end of February.

Last minute changes to the tax law might have contributed to delaying the deadline. The $1.9 trillion rescue bill that was enacted into law roughly one-month after the tax season began excludes the first $10,200 of the unemployment benefits from 2020 taxable income for people earning less than $150,000.

Since enactment of the bill, the IRS has urged taxpayers who received unemployment payments in 2020 and have already filed their tax returns to not file an amended return until the agency issues additional guidance.

For those who haven’t filed, the IRS plans to provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. 

Prior to delaying the current tax filing deadline to May 17, the IRS extended the tax filing deadlines for residents in Texas and Oklahoma who were ravaged by the winter storms in early February. These residents have until June 15, 2021, to file and pay any amounts owed on their 2020 income taxes.

The IRS has the administrative authority to amend tax filing deadlines without consent from Congress. Last year, the agency delayed the 2019 tax filing season from April 15, 2020, to July 15, 2020.

The IRS has yet to release an announcement on delaying the current tax season deadline.