Saturday, April 10, 2021

Puerto Rico Income Tax Filing Deadline Put Off Until May 17

By on March 24, 2021

Treasury Secretary Francisco Pares (Courtesy)

To Allow Treasury to Process Covid-19 Stimulus Payments, Sec. Parés Says 

SAN JUAN – In a move that was expected due to the need to process new Covid-19 stimulus payments, Puerto Rico Treasury Secretary Francisco Parés Alicea announced Tuesday that the April 15 deadline for filing 2020 individual and corporate tax returns has been postponed to May 17. 

“Every Taxpayer who files their Return based on calendar year 2020 and who, according to the provisions of Subchapter A of Chapter 6 of Subtitle A of the [Puerto Rico Internal Revenue Code], has the obligation to submit said Return no later than April 15, 2021, [but] will have until Monday, May 17, 2021 to file the same. Likewise, any balance owed with said Return must be paid no later than Monday, May 17, 2021,” states Treasury Administrative Determination 21-04. 

The department’s notice says taxpayers who need additional time to file their returns will have until May 17 to submit an “automatic extension request,” which will have a six-month term from this date. The extension request allows for extending the filing deadline but not the payment due date, according to the notice. 

“Therefore, if the request for an extension is accepted, the balance of the tax owed, if any, must be attached with the request to avoid the imposition of interest, surcharges and penalties,” the administrative order says. 

Due to the postponement, the deadline for making the second installment for 2020 individual income tax payments was also postponed until Nov. 17. 

“Therefore, every individual eligible to pay the income tax determined in the 2020 Taxable Year Return in two installments may pay the first installment with the filing of said return no later than May 17, 2021, and the second installment no later than the afternoon of November 17, 2021,” the notice reads. 

Moreover, taxpayers required to make a first installment payment of estimated taxes for tax year 2021 before or on April 15, will now have until June 15 to do so. Therefore, all taxpayers who benefit from this extension will be required to pay the two installment amounts for their estimated taxes no later than June 15, according to the agency.  

The Treasury document states that the postponement was made in response to the “limitations” experienced by the emergency caused by the health safety restrictions to curb the spread of the coronavirus. 

“The Department’s team of programmers is working hard on all the programming for the 2020 tax cycle within the limitations that the COVID-19 pandemic has brought to both the private sector and the government,” the administrative order reads, adding that the agency is “already working on the programming of the new economic stimulus package,” referring to the $1.9 trillion American Rescue Plan Act of 2021, enacted by President Biden on March 11, “so that, as soon as the Distribution Plan is approved by the federal Treasury, the money can be sent to the residents of Puerto Rico as soon as possible.” 

Parés had told reporters earlier this month that the filing deadline would likely be postponed, as was last year, due to agency tax-season employees being needed to process the $1,400 payments in the Covid-19 stimulus package. 

Pandemic Stimulus Payments 

The commonwealth’s top tax official said that distribution of the pandemic aid will likely involve “thousands of work hours” for Treasury employees who are also involved in processing income tax returns. He stressed that in contrast to the previous $1,200 and $600 stimulus payments, the latest pandemic stimulus has different criteria for eligibility, requiring the agency to change its payment programming. 

A year ago, the commonwealth government began to implement restrictions on economic activity to stop the spread of SARS-CoV2, the virus that causes the Covid-19 disease. Emergency legislation was passed last year putting off the April 15 tax deadline to July 15. 

In a press release issued March 11, Parés said the agency had submitted a plan to the U.S. Treasury and Internal Revenue Service (IRS) for the distribution of the new stimulus payments. He added that Puerto Rico could receive as much as $3.5 billion as a result of the stimulus legislation, which would have an impact on 2.6 million island residents. 

“The process before final approval should take approximately four weeks, and we will use that time internally to prepare ourselves and begin disbursement of payments immediately after we receive the go-ahead,” the Treasury chief said in a statement. 

The stimulus payments will be distributed to individuals with a Social Security number who reside in Puerto Rico and have not been claimed as dependents. 

“This assistance program is more comprehensive than the first ones we worked with because it will benefit all members of the family, regardless of age. For example, a married couple with two children could receive a stimulus of $5,600, or $1,400 for each member,” Parés explained in the March 11 release, noting that individuals with income of up to $75,000, or $150,000 in the case of married couples filing jointly, will benefit from the stimulus payments. 

Parés said the disbursements will be determined using 2020 income tax returns, if they have been filed; otherwise, 2019 tax returns will be considered. In the case of people who do not have the obligation to file a return, Treasury will use the information from the alternative form that was prepared to send the aid in 2020. It is estimated that most payments will be made four or five weeks after the plan’s approval. The deadline to complete disbursements is Dec. 31, the Treasury chief said.