After a year of deferred deadlines, employment law changes, and workplace adjustments, employees have had a lot to keep track of both inside and outside of the office. With an extension to the federal tax return deadline and other changes, what should employees know this tax season?
The Internal Revenue Service (IRS) and US Department of Treasury announced that the deadline for federal income tax filing was extended from April 15, 2021 to May 17, 2021. The extension is automatic, so individuals who need to take advantage of the extra time don’t have to do anything to apply or qualify for it.
According to the IRS, “Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed.” The reason for the extension is to give taxpayers extra time after an unprecedented, stressful year due to COVID-19.
Similar to last year, the IRS also announced an extension on health savings account contributions for 2020, which coincides with the new May 17 tax return deadline.
For taxpayers, this means more opportunities to take advantage of tax savings when preparing for healthcare costs. For employers, the extension offers an excellent opportunity to remind employees about the benefits that HSAs offer to workers—including investing their HSA funds.
With vaccination efforts in full swing, the outlook is a little brighter this year compared to last tax season. However, employees are still juggling personal responsibilities at home, staying healthy, and remote working situations, making it easy for tax responsibilities to move to the backburner. Here are some additional reminders for employees this tax year: