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New deadline in place for filing income tax returns

On March 17, the Treasury Department and the IRS issued IR-2021-59, which provides for an automatic extension of the filing and payment date for individual 2020 income tax returns from April 15, 2021, to May 17, 2021. The IRS release specifically stated that the relief does not apply to estimated tax payments that are due on and still must be paid by April 15, 2021.

Alabama provides for an automatic extension of up to six months to file Alabama income tax returns whenever there is a corresponding Federal extension. As a result, Alabama taxpayers will not need to request an extension to file the Alabama individual income tax returns without a late-filing penalty through the extended Federal due date.

Regarding the payments of Alabama income tax for the 2020 tax year, which are due on April 15, 2021, the Alabama Department of Revenue (ALDOR) will automatically waive, without request, late-payment penalties for payments remitted by May 17, 2021. However, ALDOR is not authorized to waive interest, and any interest accruing from April 15, 2021, through the actual payment date will be due. Therefore, ALDOR encourages taxpayers to make their payments for the 2020 tax year as soon as possible to avoid the accrual of interest beyond April 15.

As always, ALDOR encourages taxpayers to file as soon as they possibly can. Filing early can help ALDOR get refunds approved earlier by avoiding the logjam of returns that occurs at the deadline. The best way for taxpayers to track the progress of their refunds is My Alabama Taxes (www.myalabamataxes.alabama.gov).