1. On April 1, 2021, Governor Baker signed legislation which allows taxpayers with household income up to 200% of the federal poverty level to deduct up to $10,200 of unemployment compensation from taxable income on their Massachusetts tax return. The deduction may be claimed by each eligible individual for tax years 2020 and 2021. Federal law allows a deduction of up to $10,200 if your federal adjusted gross income is less than $150,000. Since the Massachusetts income threshold is different from the federal income threshold, you may be eligible for a deduction on your federal tax return, but not on your Massachusetts tax return.
If you have already filed your 2020 Massachusetts income tax return and you believe you are eligible for this deduction, there is no need to file an amended return.
2. In addition to the filing and payment deadline for tax year 2020 for individuals being extended to May 17, 2021, the IRS recently extended additional tax deadlines to May 17, 2021:
People now automatically have until May 17, 2021, to make 2020 contributions to their:
Individual retirement arrangements
Health savings accounts
Archer medical savings accounts
Coverdell education savings accounts
3. The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021. Lastly, the due date for Form 5498 series returns related to these accounts is now June 30, 2021.
4. 2017 unclaimed refunds The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021. To get the unclaimed refund, a taxpayer must properly address and mail the tax return, postmarked by May 17, 2021. If a taxpayer doesn’t file a return within three years, the money becomes property of the U.S. Treasury.
As a quick reminder, there is NO extension on the deadline to make first quarter 2021 estimated tax payments. That date remains at April 15, 2021.
