The federal Internal Revenue Service is pushing back the tax payment and filing deadline by a month, a move that has prompted a similar push for the state tax deadline.
Americans will now have an extra month to complete their filings, May 17 rather than April 15, as the federal government gauges the full scope of COVID-19’s economic impact on the nation. Tax filings have lagged this year, prompting the March 17 announcement.
“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,” reads a statement from IRS Commissioner Chuck Retting.
Tax season started on Feb. 12, and as of the week ending March 5, the IRS received 56 million returns and processed close to 49 million of them, according to federal data. That’s compared to 68 million returns received and 65 million processed as of March 6 last year.
New Jersey’s deadlines for filings and payments on income and business taxes are still April 15. But lawmakers want that pushed back another month.
“The state and federal deadlines need to be aligned so that the benefits of the IRS extension are not lost. The Rescue Plan will deliver much-needed support but it will also impact the finances of nearly everyone in ways that will likely require changes to filings and payments,” Sen. Budget Chair Paul Sarlo, D-36th District, said in a March 16 statement.
He introduced a bill that day pushing the filing deadline back from April 15 to May 15.
Last year, Gov. Phil Murphy and the state Legislature agreed to extend the filing deadline for state income and business taxes from April 15 to July 15, after the federal IRS offered the same extension.
“Once the American Rescue Plan is signed by President [Joe] Biden, the IRS is expected to extend the April 15 tax filing deadline,” reads a March 11 statement from the New Jersey Society of CPAs. “The [NJCPA] is calling on New Jersey lawmakers to follow suit.”
As part of the annual budget process, the state Treasury would typically present lawmakers with the numbers in May they gauge from the tax filing deadlines. It’s not clear how a one-month delay could affect the state budget process, which has to be wrapped up by June 30 each year.
Last year’s three-month extension meant that the state had to in turn extend its budget for three months, expiring on Sept. 30 rather than June 30. That was in part for the state treasury and elected officials to fully gauge the effect of the pandemic on state tax revenue.
But Senate President Stephen Sweeney, D-3rd District, contended that he later regretted that decision.