In the wake of the COVID-19 pandemic, state and federal offices remain short-staffed. The Coronavirus pandemic has impacted nearly every aspect of our lives. This year, tax time is no different. Per the Massachusetts Department of Revenue (DOR) website, the 2020 state income tax filing and payment deadlines have been extended this year. This change mimics the new federal deadline of May 17. However, for individuals who owe tax payments to the IRS, the timeline hasn’t changed, and payments are still due on schedule.
“The IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic,” said IRS Commissioner Chuck Rettig. He then went on to urge taxpayers to consider filing as soon as possible. Filing electronically and using direct deposit is the quickest way to get refunds, said Rettig. For individuals waiting on stimulus payments, it might help them get any remaining stimulus money faster.
If I file by May 17, do I need to file an extension?
The DOR says Massachusetts taxpayers do not need to file any extensions, nor should they contact the DOR or IRS directly about a late return. Taxpayers should think of this extension as a grace period. There will be no additional interest charges, fees, or penalties as long as your return is postmarked by 11:59 pm, May 17, 2021. For anyone wishing to submit their return after the deadline, an extension request must be filed with the IRS and DOR.
I didn’t make much money due to the pandemic. Do I still need to file?
Here in Massachusetts, anyone who earns $8,000 or more in total gross income must file a state income tax return. Regarding federal returns, the IRS says you must file a federal return if you earned $12,400 or more. According to these minimum earning benchmarks, some state residents may find themselves filing only a state return.
Are unemployment benefits taxable?
Yes, Massachusetts unemployment benefits are taxable. This year, some residents might be surprised by a bigger tax bill if they received heftier benefits, in part due to COVID relief programs like the CARES act.
Massachusetts residents should know that the Department of Unemployment Assistance (DUA) does not automatically withhold state income taxes. You can request these funds be withheld from your benefits when you file your claim. The DUA has already administered Form 1099-G, but if you have not received it and wish to include it in your filing, you can request a replacement at the DUA website.