Maryland Extends Individual Income Tax Filing and Payment Deadlines

Miles & Stockbridge P.C.

On January 19, 2022, Maryland Comptroller Peter Franchot announced an extension for the State’s individual income tax filing and payment deadline for tax year ending 2021. The announcement was made via a virtual news conference with a news release following shortly thereafter. Instead of tax filings and payments being due on April 18, 2022, the new automatic deadline is July 15, 2022. Taxpayers will not need to request an extension; instead both resident and nonresident taxpayers shall receive the automatic grace period.

This is the third year that the Comptroller has provided the July postponement, in efforts to aid those individuals who face financial difficulties resulting from the COVID 19 pandemic. It is estimated that over 600,000 taxpayers have benefited from the past two tax years of delayed filings and payments, as it essentially allowed such individuals a combined 1.8 billion interest free loan. The ability to maintain funds that were due earlier to the Comptroller for an additional few months were essential in allowing taxpayers to continue paying rents and maintaining small businesses. However, it should be noted that the extension for 2021 currently only apples to individuals, and not to pass-through, fiduciary or corporate income tax returns and related estimated payments, like its predecessors.

As part of the announcement, the Comptroller brought attention to the prior year’s changes regarding the federal Earned Income Tax Credit (EITC) and the State Earned Income Credit (EIC) that may benefit select residents. (Md. Code. Ann., Tax-Gen. § 10-913). Those who qualify, based on particular thresholds, are entitled to a credit on the State return that may equal up to 50% of the federal credit, and can effectively reduce or eliminate an individual’s State and local tax liabilities.

On the federal level, the Internal Revenue Service already informed the public of processing and refund delays due to issues brought by COVID. However, it has yet to push back the April 18, 2022 actual filing deadline nor has it implied any signs of postponement.

Given the varying rules in each jurisdiction, individual income taxpayers should continue to monitor state released guidance regarding potential automatic filing and payment deadlines. For example, Illinois has provided an extension for filing until May 16, 2022 for taxpayers located in certain designated counties impacted by a recent tornado. Although Maryland seems to be the first state to institute such a lengthy grace period as a result of COVID-19, it may very well be joined by other states, willing to exhibit the same desire to assist taxpayers.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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