IRS & CA DISASTER RELIEF TAXES VICTIMS OF SEVERE STORMS

2022

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IRS Taxpayers Advocate Service Disaster Relief Documentation.

If you were affected by the severe winter storms, flooding, landslides, and mudslides in California, you now have additional time to file various individual and business tax returns and make certain tax payments.

 

  • How Does Relief Work What Do I Need To Do? The IRS automatically identifies taxpayers who reside or have a business in the covered disaster areas and applies for filing and payment relief. This means if you qualify for this relief, you don’t need to request an extension of time to file or an extension of time to pay. Affected individuals will have until October 16, 2023, to file their 2022 individual income tax returns and pay any taxes that are normally due on April 18, 2023. Business taxpayers will also have until October 16, 2023, to file certain business tax returns that are normally due on March 15 and April 18, 2023. The postponement will be granted automatically.
  • What does Affected or Impacted mean for this Disaster? To be affected means that your records were located within the disaster area so it does not mean that you have to have been deterred or affected by the storms themselves you only need to have had your tax records in the disaster area or county.
  • Is It An Automatic Extension Or Do We Still File The Extension Form?  Any taxpayer who resides in, or whose principal place of business is located in, any affected California county is granted an automatic extension of time to file and pay most federal and California tax obligations until October 16, 2023. There are some tax payments that are not part of the relief so get the facts.
  • Can We Still File Tax Returns During The Normal Season But Pay Later?  Yes. Since you do not have to pay your qualified tax liability until October 16th 2022, If you already have an appointment or want to file your tax returns so that part is finished you can do so and you still will have until October 16th to Pay with no interest or penalties.
  • What Payments Qualify? The automatic extension applies to any payments for the listed return types for payments due on or after January 8, 2023, through October 16, 2023 That Means, all payments for the above return types due From January 8, 2023, through October 16, 2023, are due on October 16, 2023, without incurring late payment penalties. This includes estimated tax payments and California pass-through S-corp/LLC Partnership Franchise Taxes (Min $800) that were due March 15, 2023 for the 2022 tax year. Retirement plan contributions, including employer contributions, are also extended to October 16, 2023.
  • Are There Any Concerns Or Warnings From The Tax Accounting Communities?  Taxpayers should consider whether to wait until October 16th to pay any tax liability or to pay it sooner as each case is different. Some Taxpayers may struggle to pay liability later in the year. As well,  since the IRS is displaying sub-par customer service since the Pandemic, there is some added concern among accountants over the messaging in the disaster release that states that taxpayers may still receive incorrect notices from the IRS that would require correspondence letters or phone calls to the IRS during this time of such poor service. This can cause anxiety although the IRS assures us that any incorrect notice(s) can be rectified.

All counties in California Qualify EXCEPT:

  • Imperial
  • Kern
  • Lassen
  • Modoc
  • Plumas
  • Shasta
  • Sierra

For all other California Counties, The extension deadline applies for federal and state tax filing/payment extension purposes if a county is listed in either IRS announcement (CA-2023-01 or CA-2023-02).

Return Types:

The automatic extension applies to the filing due dates for any of the following types of returns that have a due date (original or extended due date) on or after January 8, 2023, through October 16, 2023:

  • Individual income tax returns;
  • Corporate income tax returns;
  • Partnership income tax returns;
  • Estate and trust income tax returns;
  • Estate tax returns;
  • Gift and generation-skipping transfer tax returns;
  • Annual information returns of tax-exempt organizations;
  • Payroll tax returns;
  • Excise tax returns; and
  • Employee benefit plan returns (Form 5500 series).

For more details about disaster relief due to these winter storms, refer to: