2006 IRA contribution deadline extended

WASHINGTON (1/26/07)--Taxpayers throughout the country now have an extra day, until April 17, 2007, to file their 2006 returns and pay any taxes due.

The IRS made the announcement after it became aware that, under recently-enacted legislation, April 16 is Emancipation Day--a legal holiday in the District of Columbia. Under federal law, holidays observed in the District of Columbia have impact nationwide on tax issues, including the tax filing deadline.

This delay in the tax-filing deadline affects more than just the tax filing deadline. Numerous other tax actions also qualify for the delayed deadline, including making prior-year contributions to IRAs and other tax-advantaged plans. For calendar year taxpayers, the deadline for making regular traditional IRA, Roth IRA, Coverdell Education Savings Account (ESA), and Health Savings Account (HSA) contributions for 2006 is also delayed until April 17, 2007.

Credit unions need to be aware of this delayed deadline and inform their front-line staff members that accept IRA, Coverdell ESA, and HSA contributions from members, according to Dennis Zuehlke, compliance manager for CUNA Mutual Group, which serves 80% of credit unions offering IRA programs.

Credit unions should also verify that their data processing systems are capable of accepting and properly reporting prior-year contributions received or postmarked by the April 17 deadline, Zuehlke noted.

Credit union members may be confused by news accounts of the new deadline, since it conflicts with the April 16 deadline printed in the IRS tax booklets. The traditional April 15 tax filing deadline had already been delayed until April 16 because of the rule that whenever April 15 falls on a Saturday, Sunday, or legal holiday, the deadline is the next business day.

In addition, the IRS announced earlier this year that taxpayers in the District of Columbia and six eastern states that file their returns with the IRS office in Andover, Massachusetts would have until April 17 to file their returns because April 16th is Patriots Day, a legal holiday in Massachusetts.

The IRS discovered this convergence of the D.C. Emancipation Day holiday with the tax filing deadline so late that all of the IRS publications had already gone to print with the April 16 deadline. The IRS will not be reprinting these publications, but taxpayers will have until April 17, 2007 to file their 2006 returns, make regular IRA, Coverdell ESA, and HSA contributions for 2006, and pay any taxes due, regardless of the deadline printed in the tax booklets.

Resource Links

Statement stuffer: "IRA Changes Power Your Savings"

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