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Calls to extend the federal income tax filing deadline are intensifying, fueled by the tax code tweaks in the newly-enacted $1.9 trillion stimulus bill.
“Millions of stressed-out taxpayers, businesses and preparers would appreciate an extension of the deadline to file their 2020 tax returns,” wrote more than 100 members of Congress in a letter to the Internal Revenue Service and the Treasury Department on Tuesday, less than a month ahead of the current deadline.
The letter’s signers mostly consisted of Democrats in the U.S. House of Representatives. But a handful of Republican members of the House signed on as well, suggesting growing support for giving taxpayers more time to file this year.
In February, eight Democrats signed a letter asking the IRS to push back the April 15 deadline.
Other groups have called for an extension, including a professional association of accountants who said it is “simply not possible” to meet the April 15 deadline this year, in part because the IRS started accepting tax returns later than usual this year, on Feb. 12.
Last year, the IRS extended the filing deadline to July 15 as the COVID-19 pandemic upended both taxpayers’ lives and operations at the tax collection agency.
Tuesday’s letter from lawmakers says the newly-enacted $1.9 trillion American Rescue Plan added a new layer of complexity to an already-complicated tax season.
In addition to authorizing a third round of stimulus checks, the package includes tax code changes like a federal income tax exemption on the first $10,200 in jobless benefits that a person reports on their taxes.
That exemption could result in federal income tax savings between $1,000 and $2,000 for some individual taxpayers, according to the estimates of some experts.
But many taxpayers who could take advantage of the benefit might have already filed their 2020 taxes. “The IRS will need to take action to address the changes in the tax law, and taxpayers will need additional time to fully understand how this affects their tax liability,” the letter said.
*** Anyone who received jobless benefits last year and already filed their 2020 tax return should not file an amended income tax return claiming the exemption until the IRS offers guidance on how to proceed, the agency said Friday.***
As of March 5, the IRS had received 55.7 million individual returns, an 18% drop from the returns received by March 6 one year earlier. March 6, 2020 was 40 days into the filing season; March 5, 2021 was 22 days into the current tax season, IRS statistics show.
The IRS did not immediately respond to a request for comment on the lawmakers’ letter, but IRS Commissioner Charles Rettig has previously said he was not planning on pushing back the deadline.
April 15 represents the point when taxpayers need to pay any taxes due. It’s the deadline to file a return, unless the taxpayer obtains a deadline extension to Oct. 15. The IRS has already said Texas and Oklahoma residents have until June 15 to submit their income tax returns in the wake of a devastating winter storm.
Rettig is scheduled to testify Thursday before the House of Representatives’ Ways and Means Oversight Subcommittee.
In all likelihood, he will be questioned about a possible extension at that time. Rep. Bill Pascrell, a Democrat from New Jersey, chairs the subcommittee. He was one of the lead authors on the latest extension request and signed onto the first request as well.
“Americans are under titanic strain,” Pascrell wrote Tuesday on Twitter
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“and need a little flexibility.”
The other lead author of the letter was Rep. Jamie Raskin of Maryland. Last week, his state pushed its state-level income tax filing deadline to July 15.
