Tax alert

COVID penalty relief extended in declared disaster areas

Taxpayers in disaster areas have more time to take advantage of penalty waiver

Oct 21, 2022
Business tax Private client services International tax

Executive summary

The Sept. 30, 2022 filing deadline to obtain COVID Penalty relief under Notice 2022-36 is postponed according to the particular disaster area postponement. 

Detailed discussion

The IRS published Notice 2022-36, which grants broad penalty relief for certain late filed 2019 and 2020 tax returns as well as not reporting certain required information on Form 1065 or Form 1120-S. The returns were required to be filed by Sept. 30, 2022 to qualify for the relief. The penalty relief applies to failure-to-file penalties but does not extend to failure-to-pay penalties. Refer to RSM alert

The IRS recently announced in IR-2022-185 that individuals and households that reside or have a business in recently declared FEMA disaster areas have postponed deadlines to qualify for this failure-to-file penalty relief.  The postponed deadlines correspond to the specific disaster declaration postponements.  

  • Nov. 15, 2022 deadline: Certain counties in Missouri, Kentucky, the island of St. Croix and members of the Tribal Nation of the Salt River Pima Maricopa Indian Community will be entitled to the penalty waiver for returns filed on or before Nov. 15, 2022. 
  • Feb. 15, 2023 deadline: Florida, Puerto Rico, North Carolina, South Carolina, certain areas of Alaska and Hinds County, Mississippi will be entitled to the waiver for returns filed on or before Feb.15, 2023. 

Taxpayers in the indicated disaster areas who have not yet filed tax returns for 2019 and 2020 should prepare and filed those returns prior to the above deadlines and retain proof of filing. Refer to our prior tax alerts for more information about disaster relief for victims of Hurricane Fiona in Puerto Rico, and Hurricane Ian in Florida and the Carolinas.

RSM contributors

Tax resources

Timely updates and analysis of changing federal, state and international tax policy and regulation.

Subscribe now

Stay updated on tax planning and regulatory topics that affect you and your business.

Washington National Tax

Experienced tax professionals track regulations, policies and legislation to help translate changes.