Moceri Minute

The Internal Revenue Service has extended the due date for 1040s until May 17, 2021.  The State of Michigan has also extended its due date for individual income taxes until May 17, 2021.  The exception to this is if you file estimated tax payments, as of today, your first tax estimate is due April 15, 2021.  The American Institute of Certified Public Accountants and other organizations are trying to get the first estimate due date also extended to May 17, 2021, however, no official ruling has been decided.

Regarding unemployment, The American Rescue Plan Act (ARPA) of 2021 allows the first $10,200 of unemployment compensation to be tax-free for federal purposes.  The IRS is asking that if you had unemployment and your income is below $150,000, do not file your return until they make the necessary changes to their software programs to handle the change.  If you have already filed your return, as of now the IRS has indicated that they will make the adjustment and send out refund checks.  No timeframe for this to happen has been announced.  Regarding the State of Michigan, the calculation for Michigan taxes begins with your Federal Adjusted Gross Income and that number will now be less due to the reduction of non-taxable unemployment.  The State of Michigan is waiting for the IRS to determine how they will be issuing refund checks for returns already filed and then they will make an announcement on how they will handle the refunds. 

We will keep you informed on both these issues in the coming weeks.

Please call us if you have any questions!