The Iowa Department of Revenue has extended the filing and payment deadline to June 1, 2021 for 2020 individual income tax returns and first quarter estimated income tax payments for individuals from the April 30, 2021 statutory deadline.
The changes are the result of Order 2021-01 signed by Director of Revenue Kraig Paulsen. Paulsen said the state’s economy is showing good strength and the filing extension is an appropriate step to help Iowans whose lives have been disrupted by the pandemic.
Specifically, the Order allows Iowa residents or non-resident individuals required to file Iowa returns an extension for filing the IA 1040 Individual Income Tax Return and all supporting forms and schedules, and any associated tax payments, including quarterly estimated income tax payments due April 30, 2021. The Order does not include business filers and other tax types for individuals. For more information see the Department’s COVID-19 FAQs.
No late-filing or underpayment penalties shall be due for qualifying taxpayers who comply with the extended filing and payment deadline in this Order. Interest on unpaid taxes covered by this Order shall be due beginning on June 2, 2021.
State Unemployment Compensation Exclusion
Because Iowa is a state that automatically conforms with the Internal Revenue Code, certain unemployment compensation will not be included in Iowa income. Based on the federal legislation, the first $10,200 of unemployment compensation income is excluded from taxation for qualifying taxpayers.
Because the federal legislation was enacted subsequent to many taxpayers filing their returns, taxpayers were unable to take advantage of this change. As a result and to assist these taxpayers, the Department will begin making unemployment compensation related automatic adjustments. The adjustment process may take up to 90 days due to cross-checking these amounts against 1099s and validating eligibility to ensure accuracy and eliminate fraud.
Taxpayers will not need to file an amended Iowa tax return if their only adjustment pertains to unemployment compensation. Taxpayers filing an original 2020 individual income tax return should report the unemployment compensation exclusion amount on Form IA 1040, line 14, using a code of M.
Refund Processing and Assistance
The Department currently is processing state income tax refunds in 28 days, slightly under the Department’s goal of 30 days. Taxpayers can check the status of their refunds online at the Department’s website Where’s My Refund.