Tax Relief

FEDERAL RESOURCES

The Internal Revenue Service (IRS) has extended the federal income tax filing and payment deadline from April 15, 2021 to May 17, 2021. Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until October 15, 2021 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
The IRS urges taxpayers to file electronically so their returns are processed quicker. Most tax refunds associated with e-filed returns are issued within 21 days. NOTE: A new retroactive provision in the American Rescue Plan makes the first $10,200 of 2020 unemployment benefits nontaxable. If you’ve already filed a 2020 tax return do not file an amended return at this time. The IRS will issue additional guidance.

The American Rescue Plan of 2021 makes the Child Tax Credit fully refundable, increases the amount per child from $2,000 to at least $3,000, and makes 17-year-olds eligible as qualifying children.
Specifically, the Child Tax Credit will increase to $3,000 for every child aged 6 to 17 and $3,600 for every child under the age of 6. The payments will begin on July 1, 2021 and run through December 2021.
The Plan directs the Secretary of the Treasury to issue advance payments of the child tax credit, based on the parents’ 2019 or 2020 tax returns. Under this directive, eligible parents should receive regular periodic monthly advanced payment of the tax credit to ensure their families have access to assistance throughout the year, rather than just at tax time.
Single filers earning up to $75,000, head of household filers earning up to $112,500, and joint filers earning up to $150,000 will qualify for the full payments of the expanded Child Tax Credit.
The payments are phased down for individuals whose income exceeds these thresholds, with the expanded portion of the credit reduced by $50 for each $1,000 of additional income over the threshold limits.
For more information and to see if you qualify for the credit, click here.

The American Rescue Plan makes several improvements to the Child and Dependent Care Tax Credit for 2021, including increasing the amount of child and dependent care expenses that are eligible for the credit to $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals. With this change, families will get back -- as a refundable tax credit -- as much as half of their spending on child care for children under age 13, so that they can receive a total of up to $4,000 for one child or $8,000 for two or more children.
Click here for more information.

Low- to moderate-income workers with qualifying children may be eligible to claim the Earned Income Tax Credit (EITC) if certain qualifying rules apply to them. You may qualify for the EITC even if you can’t claim children on your tax return.
The American Rescue Plan raises the maximum EITC for childless adults from roughly $530 to close to $1,500, raises the income limit for the credit from about $16,000 to about $21,000, and eliminates the age cap for older workers for 2021.
For more information and to check if you qualify, click here.
If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your EITC for 2020.

STATE RESOURCES

Maryland Comptroller Peter Franchot has announced a 90-day extension, from April 15, 2021 to July 15, 2021, for state income tax filing and payments. No interest or penalty for late payments will be imposed if 2020 tax payments are made by July 15, 2021.All new tax forms will be available on the Comptroller's website by April 15. The Comptroller's office encourages taxpayers who are aiming to subtract unemployment income, make other adjustments related to recent federal and state-passed COVID-19 legislation, or amend their previously filed taxes to wait until that time to file.
For more information, please call 1-833-345-0787.
Individuals with questions regarding income tax return filings and payments can email taxhelp@marylandtaxes.gov.
Taxpayers who are currently on payment plans for tax payments and who are having hardship making those payments, they can email an employee in our Individual Collections Section at COVID19@marylandtaxes.gov or email RELIEFAct@marylandtaxes.gov.
Businesses struggling to make business-related tax payments due to COVID-19 closures and restrictions they should email taxpayerrelief@marylandtaxes.gov.