IRS Notice 2021-21 (Mar. 29, 2021); IRS News Release IR-2021-67 (Mar. 29, 2021)
In response to the continuing COVID-19 emergency, the IRS has offered deadline relief for 2020 federal income tax returns that also extends the deadline for 2020 contributions to HSAs, IRAs, and certain other accounts. In addition, the relief extends the time for filing and furnishing certain retirement-related forms. Here are highlights:
Form 1040 Series. Federal income tax returns on any Form 1040 series form, and any tax payments in connection with those forms, with an original due date of April 15, 2021, are now due May 17, 2021. The extension applies to all schedules, returns, and other forms that are filed with a Form 1040 series form or are required to be filed by the 1040 series form deadline, as well as to all elections made or required to be made on the 1040 series form or attachment. The extension automatically postpones reporting and payment of the 10% additional tax on early distributions from 401(k) plans, other workplace retirement plans, and IRAs.
Contributions to HSAs, IRAs, and Other Accounts. The filing and payment extension for federal income tax returns automatically postpones to May 17, 2021, the deadline for making 2020 contributions to IRAs, HSAs, Archer MSAs, and Coverdell education savings accounts.
Form 5498 Series. The notice extends to June 30, 2021, the due date for filing and furnishing Form 5498 series forms, including Form 5498-SA (HSA, Archer MSA, or Medicare Advantage MSA Information) and Form 5498 (IRA Contribution Information).
Tax Refunds and Credits. Federal income tax refund or credit claims on a Form 1040 series form or on Form 1040-X that have a period of limitations ending on or after April 15, 2021, and before May 17, 2021, may be filed through May 17, 2021.
Tax Return Preparers. The notice also extends a continuing education deadline for certain tax return preparers.
EBIA Comment: The relief announced in this notice comes quite close to the deadlines it extends. For some it could be too late to be useful, but for others it will be welcome relief. Note that if employer HSA contributions are made for a prior year, the employer must notify the HSA trustee or custodian and inform the employee of that designation. Such contributions are reported in box 12 with code W on the employee’s Form W-2 for the year in which the contributions are actually made. For more information, see EBIA’s Consumer-Driven Health Care manual at Section XII.M (“When Must HSA Contributions Be Made?”), and EBIA’s 401(k) Plans manual at Section XIV.K (“10% Additional Tax on Early Distributions”).
Contributing Editors: EBIA Staff.