April 18, 2018

CWF's IRA/HSA Guidance - IRS Extends the 2017 Tax Filing Deadline For Some Taxpayers. Does it Apply For IRA/HSA Contribution Purposes ?

On April 17, 2018, at 8:18 p.m. the IRS issued IRS Newswire 2018-100.

The IRS provides certain individuals with an additional day to file their 2017 federal income tax returns because yesterday the IRS computers had issues.

If a person is filing their 2017 tax return electronically, the deadline is now midnight on Wednesday, April 18, 2018.

This initial IRS guidance does not address in any manner the making of IRA and/or HSA contributions for tax year 2017. The IRS will need to issue further guidance.

One would think if the IRS has revised the deadline for filing the 2017 federal tax return, such revision will also apply for purposes of making the 2017 IRA contribution and the 2017 HSA contribution.

Note it is likely that the IRS position will be - this change only applies to a person who files their 2017 federal income tax return electronically on April 18, 2018, and who makes an IRA contribution and/or HSA contribution on April 18, 2018. This change would not apply to a person filing a paper return or someone who filed their return on or after April 17, 2018.

The IRS will need to issue further guidance as to how an IRA/HSA custodian is to report such contributions for Form 5498 purposes.

You may have some customers who believe/argue the revision applies to all taxpayers. Such customers can explain this when they file their tax returns. An IRA custodian must follow IRS instructions.

We will keep you informed as we learn more.