Courtesy of COVID-19, tax season 2021, filing tax returns for 2020, is nothing resembling normal. There was staffing shortages at the IRS already due to decreased funding even prior to COVID-19, IRS staffing shortages due to COVID-19, three rounds of stimulus checks to get out,

Tax professionals such as CPAs and Enrolled Agents are struggling too. In fact, in mid-March I had a tax preparation colleague I’ve worked with before reach out to me to ask if I was immediately available 20+ hours a week for the rest of tax season. All the tax professionals are extra swamped this year, software is undergoing updates on the fly, and many clients tax returns are much more complicated than usual. In addition, a proper tax interview is an important part of the tax return preparation, learning what’s new or what has changed this year, and that’s hard to do well in a social distancing environment as we’re still mid-pandemic. These complications included: late breaking form updates, lower wages, possibly a multitude of W2s as people picked up work where ever they could find it or even new businesses people tried to start up from home, receiving unemployment, hardship withdrawals from 401ks, filing for stimulus funds that weren’t received at any one or more of the three check issuance cycles. And then the tax office staff also has to worry about getting paid, while clients have less free cash flow than usual.

Important tax timelines that you need to know:

• You couldn’t start filing until mid-February instead of mid-January
• If you were expecting an EITC or ACTC related refund, that couldn’t be refunded to you before early March anyway, as a fraud prevention measure. But there wasn’t any additional delay built into the schedule due to the month delay in starting filing acceptance.
• If at all possible, whether you owe money or you are expecting a return, file electronically. Generally, as soon as possible.
  • This is because at normal year-end (eg November 2019), they have less than 200,000 paper returns still sitting in their queue. But by November 2020, they still had 4.7 MILLION paper returns stuck in their queue. As of Christmas, that number was up to an eye-popping 12 million paper returns backlogged.
  • If you owe money, and they haven’t processed your return, despite the fact you’ve paid you may start getting nasty-grams from the IRS. And the phone queues are overloaded too, and the people on the other end often don’t know any more about your situation than you do.
  • If the government owes you money, you obviously aren’t going to get it until they process your return.
• April 15th – Unchanged, quarterly estimated payment date, for those self-employed or otherwise needing to submit withholdings outside of a W2 situation.
• May 17th – As of earlier this month, the IRS extended their tax deadline to be May 17th instead of April 15th. But it can’t force the states to go along, and you have to have your federal return completed before you can file your state return.
  • This automatically extended the deadline for other important federal financial components, such as starting and/or funding 2020 IRA contributions, and employer contributions for existing solo 401ks.
• May 17th – Minnesota also extended their tax deadline, to match the IRS deadline.
  • Not in Minnesota, or have more than one state you need to file for? Check for your state on this list.
• October 15th – unchanged, the federal and Minnesota tax deadline, if you filed an extension by May 17th.

And please be kind to your tax professional, while you’re anxious to get your paperwork filed, they’re doing the best they can, it may take (significantly) longer than usual.