What You Need To Know This Tax Season

May 12, 20210 comments

After the challenging year we’ve had, the last thing any Marylander needs is stress about filing your taxes. See below for tips and resources to help make the process as easy as possible. 

It’s May, aren’t taxes due in April?

Yes, normally. But because of pandemic-related changes to the tax code, Marylanders have an extra month to file their federal return and three extra months to file state income taxes.

So when’s the new deadline?

Comptroller Peter Franchot extended the filing deadline to July 15. If returns are filed and taxes owed are paid by the new deadline, no interest or penalties will be assessed. The state’s extension applies to individual filers, as well as pass-through, fiduciary and corporate income tax returns, including first- and second-quarter estimated payments.

What if I already filed my state taxes and need to revise them now because of the last stimulus package and/or unemployment benefits?

That’s allowed. The Comptroller’s office has asked for patience for any Marylander who needs revised forms to amend their taxes. Amended forms will allow taxpayers to take advantage of an unemployment insurance subtraction that was approved as part of both the federal and Maryland stimulus bills.

What about Sales and Use tax returns?

Due to the changes from the state’s Relief Act, the deadline for those has also been revised and any returns for sales taking place in March, April and May will be due July 15.

How do I know what tax credits or deductions I am eligible for? 

The long list of tax credits can be hard to keep up with. You can always consult with a professional, and the Comptroller’s office has a great online list of options, including the Earned Income Tax Credit, Student Loan Debt Relief Tax Credit, Child and Dependent Care Tax Credit, and many more.

Ok, so I’m caught up on state tax filing info, what about federal taxes?

Glad you asked. The deadline to file and pay most federal income taxes has been extended to May 17, 2021. Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. And if you need additional time to file beyond the deadline, you can request an extension until October 15 by filing a Form 4868, which gives an extension to file your 2020 tax return but doesn’t grant an extension of time to pay taxes due. 

I hear there are changes to the federal Child Tax Credit; what do I need to do?

For tax year 2021, families claiming the Child Tax Credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 and $3,600 per qualifying child under 6. The credit is now fully refundable, meaning you may benefit even if you don’t have earned income or don’t owe any income taxes. And you may be able to get part of your refund before filing your taxes. The IRS will be posting updates at www.irs.gov/childtaxcredit2021

Any tips on how to choose a paid tax preparer?

Of course. One of the biggest things to beware of tax preparer scams. A great resource is the Maryland Department of Labor site that includes Maryland Registered Tax Preparers, a CPA license search option, IRS enrolled agents and attorneys in good standing. Always make sure that you get a copy of your return and that your preparer signs the return with their name and PTIN (Preparer Identification Number). Remember, you are responsible for all of the information on the return, even if it’s incorrect!

What if I need more information or I want to file for free on my own?

The CASH Campaign of Maryland has a ton of helpful resources and tips you can access. 

The IRS offers a Free File to let you prepare and file your federal income tax online for free. They offer different options based on income. Keep an eye out for fees for add-on services, like audit protection. You can file your state return separately for free through the Comptroller’s iFile website

To check the status of your refund, visit https://interactive.marylandtaxes.gov/INDIV/refundstatus/home.aspx

To read the full tax alert statement from the Comptroller’s office: https://www.marylandtaxes.gov/RELIEFAct/docs/TAX_ALERT_2021_EXTENSION_03-11-2021.pdf

For more information, visit https://www.marylandtaxes.gov/.