The IRS is reportedly planning to push back the tax filing deadline.
CNBC reports the agency will delay the deadline by one month. Bloomberg reports the new deadline will be May 17.
The decision comes after growing calls to extend the deadline. The American Institute of CPAs and more than 100 members of Congress sent letters to IRS leadership this week asking the agency to delay the filing deadline.
“In my opinion, it’s actually worse than last year,” said Caroline Chen, assistant professor in the accounting and finance department at San Jose State University’s College of Business, who specializes in taxes. “I think that tax return preparers, whether you’re paid or not paid, taxpayers and even the IRS itself would benefit immensely from having an extension of the filing deadline.”
Professor Chen says there are a few contributing factors including the passage of the American Rescue Plan, which forgives taxes on some unemployment payments dating back to 2020.
“It’s very rare that tax law is passed to apply retroactively.”
If you received unemployment benefits last year and have not filed your taxes yet, the IRS has released a form to claim the tax forgiveness.
Professor Chen says the form is quite complicated, although there are free services in the Bay Area to help people who are lower income.
And it is even more complicated if you already filed.
“Now the tax that they actually paid is incorrect,” she said, and the IRS is telling people not to file an amended return just yet. “For everyone who’s already filed their tax returns and had unemployment compensation reported on their tax returns is in a holding pattern right now.”
The American Rescue Plan also added more to the IRS’ workload, as the agency is responsible for sending out those $1,400 stimulus checks.
Beyond that is the fact that IRS workers, just like many American workers, have been out of the office for a year now and may not be back up to speed on processing.
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