Over the last few days I am seeing a common trend with the questions our clients are asking I’m going to try to break it down so we are all on the same page.
I am going to address the following topics:
Non drafting of auto payment for balances due to the IRS
Revised filing deadline for Federal tax returns
Possible delays with refunds due
Unemployment Compensation Exclusion
Non drafting of auto payment for balances due to the IRS
I know a few of you have reached out to me since the IRS has not auto deducted your payment as scheduled. I was on the phone with the IRS, and it seems that, while your returns have been accepted by the “taxing authorities”, the Internal Revenue Service has not “processed your returns.”
The only thing these returns have in common is that they were submitted on/after April 1st. The IRS agent I spoke with quoted processing times of 21 days. He said once the return is processed, the payment will auto draft.
Revised filing deadline for Federal tax returns
As the filing deadline was extended to May 17th, I have been assured that there will be no interest or late fees assessed when filing after April 15th in which a balance is owed to the IRS.
Possible delays with refunds due
Equally, there may be a delay on refunds as they seem to be ensuring no one is “double dipping” when it come to the Recovery Rebate Credit (making sure that payments have not been mailed out or direct deposited and then claiming those on the return).
Unemployment Compensation Exclusion
With regards to those of you who have filed tax returns with unemployment income prior to the Unemployment Compensation Exclusion being fully enacted when signed as part of the American Rescue Plan when signed on March 11th, 2021. It may have taken some days for the tax software to be update. (This exclusion applies to those whose modified AGI under $150,000), the IRS is working on automatically working on processing refunds to those eligible in May. Here is the full notice from the IRS.
https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-may
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