The official deadline to file a 2020 federal tax return is just one day away, on Monday, May 17.
Although it’s nearly a month after the usual deadline, millions of people have still not filed their taxes.
Here are some of the important tax changes to note.
Will States Also Offer Taxpayers More Time to File?
States that also extended their deadlines to May 17 include Alabama, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia and Wisconsin.
Some states, however, decided to make different deadlines. They include Hawaii, April 20; Iowa, June 1; Maryland, July 15; and Oklahoma June 15, which only applies to tax payments, while returns still had to be sent in by April 15.
And in Louisiana, taxpayers must file by May 17, unless they live in a federally declared disaster area because of the February winter storm. Those residents have until June 15.
Can Taxpayers Extend the May 17 Deadline?
For those who can’t file a 2020 tax return by Monday, there is an option to request an automatic filing extension that would offer an extra five months to file. To do so, a request must be filed to the IRS by Monday.
But it’s important to note that an extension to file a tax return doesn’t mean that the taxpayer gets an extension to pay the government what is owed. The taxpayer must pay their bill by May 17 to dodge a potential late payment penalty.
If a taxpayer is expected to receive a refund and still requests an extension, it will take longer for the person to receive the refund.
When Should Taxpayers Expect a Refund?
Tax refunds are usually issued within 21 calendar days of the IRS getting a tax return. The fastest way to get a refund, however, is if taxes are filed electronically and the taxpayer chooses to receive a direct deposit.
But with the pandemic, as well as a massive pile of 2019 and 2020 returns that still need to be processed, it could take longer. National Taxpayer Advocate Erin Collins said that there were over 29 million returns being held for manual processing.
To find the status of a tax return, the IRS released the “Where’s My Refund?” tool. Taxpayers can check the status within 24 hours of when the agency notes that they received the return, or four weeks after a taxpayer mailed in the paperwork.
Are Stimulus Payments or Unemployment Benefits Taxable?
The stimulus payments are completely tax-free.
Some people who are eligible for the first two rounds of direct relief and didn’t get the stimulus money can still get it if they claim the refundable Recovery Rebate Credit.
Unemployment benefits, however, are taxable. But for families with modified adjusted gross income less than $150,000 last year, the initial $10,200 in jobless aid for each individual taxpayer in a household will not be federally taxed, due to a provision signed by President Joe Biden’s in his recent rescue package passed in March.
For those who filed their tax return before Biden’s bill went into effect, the IRS said it will automatically recalculate their returns to account for the $10,200 exclusion and either refund taxpayers or apply it to owed taxes.
Some people will still need to file an altered return if the exclusion makes them newly eligible for certain federal credits and deductions that were not claimed on the original return.
It’s also encouraged to review state income tax guidance to see whether the state a taxpayer may be filing in is following the IRS rules of excluding the first $10,200.
Do Students Get Tax Breaks?
For those who have received pandemic-related emergency financial aid grants in 2020, the IRS noted that they do not have to include that amount in their gross income figure.
Students who used the grants for tuition or other school expenses in 2020 may be eligible to claim them as a deduction, known as the American Opportunity Credit or the Lifetime Learning Credit.
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.