Executive Summary
The IRS issued tax relief for certain Florida counties due to Hurricane Nicole. Certain filing and payment deadlines starting on or after Nov. 7, 2022, and before March 15, 2023, will be postponed to March 15, 2023. This includes estimated tax payments due Jan. 17, 2023 and quarterly payroll and estimated taxes normally due on Jan. 31, 2023. The guidance also provides for special treatment of gain/loss recognition for taxpayers experiencing casualty loss.
Detailed analysis
Extended due date – filing and payment relief
During the last weeks of December 2023, the IRS updated guidance granting relief to taxpayers affected by Hurricane Nicole by adding to the list of counties impacted as well as providing an additional postponement of filing dates. Affected taxpayers will now have until March 15, 2023, to file various individual and business tax returns and to make tax payments. The relief includes individuals and households that reside or have a business in any of the following counties in Florida:
Alachua, Baker, Bradford, Brevard, Broward, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Holmes, Indian River, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Martin, Miami-Dade, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Suwannee, Taylor, Union, Volusia, Wakulla and Washington Counties. The Miccosukee Tribe of Indians of Florida and the Seminole Tribe of Florida also qualify for this tax relief.
The relief postpones various tax filing and payment deadlines that occur on or after Nov. 7, 2022 and before March 15, 2023. Affected taxpayers will now have until March 15, 2023 to file returns and pay taxes that were originally due during this period. Estimated tax payments normally due Jan. 17, 2023 are postponed to May 15, 2023 for those in impacted counties. Quarterly payroll and excise tax returns, normally due on Jan. 31, 2023 are also postponed to March 15, 2023. In addition, penalties on payroll and excise tax deposits due on or after Nov. 7, 2022, and before Nov. 22, 2022, will be abated as long as the deposits were made by Nov. 22, 2022.
The IRS relief includes other time-sensitive actions described in Reg. section 301.7508A-1(c)(1) and Rev. Proc. 2018-58; filing Form 5500 series returns due on or after Nov. 7, 2023, and before March 15, 2023; and transferors who are not affected taxpayers but who are involved in a section 1031 like-kind exchange pursuant to section 17.02(2) of Rev. Proc. 2018-58.
Disaster-related casualty losses
In addition to extensions of time to file tax returns and complete certain actions, presidential disaster declarations offer taxpayers special options with respect to gain/loss recognition. Taxpayers who experience a casualty loss in a presidentially-declared disaster area may qualify to recognize losses in the year prior to the year the casualty actually occurred under section 165(i). Taxpayers who realize gains by receiving insurance proceeds in excess of basis may be able to defer gain recognition by reinvesting in qualified property under section 1033. Some of these actions are time sensitive, so taxpayers are encouraged to contact their tax advisor to take advantage of the full range of relief options. Taxpayers that will claim a disaster loss should put the Disaster Designation in bold letters at the top of their return and include the FEMA disaster declaration number FEMA-4680-DR on the return.
Please see the applicable news release and refer to Publication 547 and Instructions to Form 4684 Casualties and Thefts for instructions.
Automatic penalty relief
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the IRS should be contacted to have the penalty abated.
Relief for those impacted outside the disaster area
The IRS will also work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
