COVID-19 has made for a rocky tax filing season. Since many IRS employees were working from home and local tax assistance offices were shut down, it was hard for taxpayers to get questions answered. It also led to a backlog of paper returns.
Meanwhile, the agency had more work than usual after it was tasked in late March with processing the more than 160 million direct stimulus payments—a key part of Congress’s economic response to the pandemic.
Taxpayers Can Request an Extension to Oct. 15
As usual, taxpayers have the option to request an extension to file their taxes. To request extra time, taxpayer must submit a form by July 15 —which requires an estimate of their tax liability. Then, the full return is due Oct. 15.Your Refund Might Be Bigger Than Expected
This year, the IRS will pay interest on refunds issued after April 15, the original tax deadline. That applies to returns filed before July 15.Taxpayers issued a refund between April 15 and June 30 will earn 5 percent interest and those who receive one between June 30 and Sept. 30 will earn 3 percent interest.
File Online. There’s a Huge Backlog of Paper Returns
Taxpayers who already filed a paper return and are due refunds may be waiting awhile for their money.A huge backlog of paper returns, along with other mail, piled up in trailers while IRS employees were told to work from home. They started returning to the workplace in late May.
There’s Still Time to Contribute to IRAs
Contributions made up until July 15 to a traditional IRA are deductible on a 2019 tax return.Most State Returns Are Due July 15, Too
Most state individual income tax deadlines were also postponed to July 15—but not every state followed suit.Hawaii pushed it to July 20 and the deadline has already passed in Idaho and Virginia. New Hampshire left it at April 15.