IRS Gives Savers an Extra Month to Salt Away 2020 Funds
Taxpayers have until May 17 to add to their 2020 retirement and health saving plans, the IRS said Monday.
The extension applies to 2020 IRAs, Roth IRAs, and HSAs, as well as Archer medical savings accounts and Coverdell education savings accounts. Any tax due on last year’s distributions from IRAs or work-based retirement plans is also due May 17.
The new due date is an extension of the traditional April 15 date and now matches the deadline for individual 2020 income tax payments and filings. The IRS postponed the federal tax deadline to give people more time to figure out their finances during a complicated pandemic year. The extension will also give the IRS more time to determine how to issue refunds to early filers for a tax break on a portion of last year’s unemployment benefits from the American Rescue Plan, passed after the start of tax season.
Separately, if you have a refund from tax year 2017, you also now have until May 17 to claim it. If you fail to claim a refund within the three-year window, that money will go to the U.S. Treasury. Additionally, foreign trusts and estates with federal income tax filing or payment obligations—or those who file the U.S non-resident income tax form—now also have until May 17 to do so.
For those with income not subject to withholding (such as income from self-employment, investments, or rental property), first-quarter estimated tax payments are still due April 15, though. “Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments,” the IRS said.