Individuals and businesses impacted by recent storms in California will have an extended deadline to file federal tax returns and make payments, according to a recent IRS announcement. The Federal Emergency Management Agency (FEMA) has designated a wide range of counties throughout the state as disaster areas, and the relief is applicable to any area in that area.
The tax relief delays a number of deadlines for filing and paying taxes that were supposed to start on January 8, 2023. As a result, affected people and businesses will have until May 15, 2023, to file returns and make any back taxes that were initially due during this time.
This includes 2022 individual income tax returns, due on April 18, as well as 2022 business returns, and contributions to IRA and Health Savings Accounts that were due on March 15 and April 18. Additionally, farmers and others who are affected will have until May 15, 2023, to file their 2022 return and pay any tax due, and to make quarterly estimated tax payments, which were normally due on January 17 and April 18, 2023.
The IRS is also providing relief from penalties on certain tax deposits. For example, penalties on payroll and excise tax deposits that were due on or after January 8, 2023, and before January 23, 2023, will be abated as long as the tax deposits are made by January 23, 2023. Additionally, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline are located in the affected area.
People and businesses in the affected area can choose to claim disaster-related losses on either the return for the year the loss occurred (in this case, the 2023 return typically filed next year), or the return for the previous year if they suffered uninsured or unreimbursed losses (2022, normally filed this tax season). On any return that claims a loss, they can do this by writing the FEMA declaration number, 3691-EM.
It should be noted that any taxpayer with an IRS address of record located in the disaster area will automatically receive filing and penalty relief from The IRS. As a result, taxpayers can obtain this relief without contacting the agency. The affected taxpayer should call the number on the notice to have the penalty waived, however, if they receive a late filing or late payment penalty notice from the IRS with an original or extended filing, payment, or deposit due date that falls within the postponement period.
The Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time. The tax relief is intended as a coordinated federal response to the damage caused by the storms and is intended to provide some relief and assistance to those who have been impacted.