How Soon Can You File Your 2020 Tax Return?
Filing Deadlines and Refund Information for the 2020 Tax Year
Tax professionals are peppered with questions about when people can file and how soon they can receive a tax refund every year as the calendar flips over to January. The answers depend on a few factors, such as when you receive important tax documents, and filing early doesn't necessarily mean that you'll receive your refund any sooner.
Despite that, there are a few dates you can count on all the same. The Internal Revenue Services (IRS) typically announces them no later than the second week in January for the upcoming filing season.
Collect Your Income Documents
Your employer has until Feb. 1, 2021 to send you your W-2 form reporting your 2020 earnings, and most 1099 forms must be sent to independent contractors by this date as well. This deadline typically falls on Jan. 31, but this tax year, it’s been bumped to the next day—a Monday—because Jan. 31 falls on a Sunday.
While employers are supposed to send out W-2 forms by Feb. 1, this doesn't mean that every single one of them will do so.
Reach out to your employer and request a copy or a duplicate copy if you haven't received yours by that date. If that doesn’t work, you can also call the IRS for assistance at 800-829-1040.
You can file IRS Form 4852, a W-2 substitute, if the April tax-filing deadline is looming and you still don't have your W-2, but this can be a bit of a headache. As you'll have to accurately calculate your earnings and withholding amount based on your final pay stub for the year, you may want to reach out to a tax professional if you find yourself in this situation.
Does My Stimulus Payment Count as Income?
The IRS stated in May 2020 that the economic impact payments provided to Americans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act are not taxable income. You don’t have to give any portion of that money back to Uncle Sam, and it won’t reduce your refund if you have one coming to you.
Stimulus payment is not considered income for other purposes, either, such as eligibility for government benefits or assistance.
Many state governments, including New Jersey and Massachusetts, have indicated that they’re not taxing these stimulus payments, either. You most likely won’t have to report the payment you received on your state tax return, but check your state’s website or confer with a local tax professional in your area to be sure.
As for that extra $600 a week in unemployment benefits that you might have collected in 2020, this money is taxable and must be reported on your 2020 federal income tax return. As for your state tax return, you most likely have to report it, but you’ll want to check with your state’s taxing authority to be sure.
When Tax Filing and Processing Begins
The IRS will begin accepting and processing 2020 tax returns on Friday, Feb. 12, 2021—about three weeks later than the usual date, which typically is in the last week of January. The IRS has indicated that it must take the time to address tax law changes that went into effect on Dec. 27, as the agency provided additional benefits in response to the coronavirus pandemic.
You can file your federal tax return as soon as you have all the relevant information and documents you need, but this doesn’t mean that the IRS will immediately process your return before Feb. 12.
Most tax professionals and tax software companies, including those with the IRS Free File program, will prepare your return immediately if you have all your income documents in order. Free File opens on Friday, Jan. 15. You can even e-file or mail in your return before the official opening date, but the IRS will just set it aside until Feb. 12. At least your return will be at the head of the line for attention when the gates do open.
The Tax Filing Deadline
April 15 falls on a Thursday in 2021, so that's the deadline to file your personal tax return for the 2020 tax year. Residents of Maine and Massachusetts had an extra two days back in 2019 because April 15 fell on Patriot's Day in these states, but you won’t have extra time this year if you live there. Patriot's Day is observed on Monday, April 19 in 2021, so all taxpayers are subject to the April 15 deadline for their 2020 tax returns.
You can request a six-month extension from the IRS—pushing your filing deadline back to Oct. 15 of this year— if you're not ready to prepare and file your tax return by April 15. It’s a simple matter of filing Form 4868 rather than your tax return by that date. Payment of any taxes you owe for the year are still due by the April deadline, however. The IRS will charge interest and sometimes late payment penalties if you don't pay by or before then.
Tax Day was postponed to July 15 in 2020 due to the coronavirus pandemic, but the IRS has not yet given any indication as to whether that might happen again in 2021, so your safest bet is to count on it being April 15.
When Will You Receive Your Refund?
The IRS has historically said that it issues refunds in less than 21 days for most returns, but it can take up to six weeks if you mail in a paper return. The IRS advises that, if you're requesting a paper check for your refund rather than direct deposit, you should add another estimated 10 days to allow for the postal delivery process.
It Can Depend on the Tax Credits You Claim
The Protecting Americans from Tax Hikes Act of 2015, commonly known as the "PATH Act," began delaying some refunds in 2017.
The IRS isn't permitted to issue your refund before mid-February regardless of when you filed if you're expecting a refund because you claimed the earned income tax credit (EITC) or the refundable portion of the child tax credit. The PATH Act provides that the IRS needs time to examine returns claiming these refunds to prevent fraud, which would ultimately result in tax hikes to all taxpayers across the board.
You can check the status of your refund and get a more exact date after that time by visiting the IRS website.
You're still subject to this delay even if your refund is only due in part to the EITC or the child tax credit. Here’s what will happen: The IRS won’t send you one refund for $1,000 and hold the EITC portion of your refund until the end of February if you overpaid $1,000 in taxes and you are also entitled to a $1,000 EITC refund for a total of $2,000. Your entire refund will be delayed.
2021 Tax Planning
Filing and refund dates aren't the only deadlines taxpayers have to concern themselves with. Certain payments and reporting requirements are sprinkled over the calendar year, and missing any of them could create a headache when it's time to file again in 2022. Here are a few other deadlines you may want to keep in mind:
- Sole proprietors and independent contractors who aren't subject to tax withholding by an employer should make quarterly estimated payments on Jan. 15, April 15, June 15, and Sept. 15 of this year. The Jan. 15 payment is especially important because it's the last payment for the 2020 tax year, so this is one you definitely don't want to miss.
- Employees who earn more than $20 in tips in the month of December 2020 should report them to their employers on Form 4070 by Jan. 11, 2021, and every month going forward.
- The last day to make IRA contributions for the 2020 tax year is Tax Day—April 15, 2021.