Executive Summary:
The IRS issued an announcement further postponing certain filing and payment deadlines affecting impacted taxpayers in California, Alabama and Georgia federal disaster areas to Oct. 16, 2023.
The IRS previously issued initial tax relief for these disaster areas, which provided filing and payment relief to May 15, 2023, for those deadlines falling from the respective disaster commencement date through May 15, 2023. This included estimated tax payments due Jan. 17, 2023 and April 18, 2023. It also included individual returns and business returns due March 15 and April 18, 2023. The relief included quarterly payroll taxes and returns. The guidance also provided for special treatment of gain/loss recognition for taxpayers experiencing casualty loss.
The current announcement extends the May 15 due date. The same acts permitted to be postponed remain eligible to be postponed. This means that estimated taxes due Jan. 17, April 18, June 15 and Sep. 15, 2023, are all due by Oct. 16. 2023. Likewise, payroll tax returns due Jan. 31, April 30 and July 31 are now due Oct. 16, 2023. In addition, tax-exempt organization returns normally due on May 15 are now due on Oct. 16.
Detailed analysis
Extended due date – filing and payment relief
The IRS issued guidance granting further relief to taxpayers affected by several disasters in California, Alabama and Georgia by providing an additional postponement of filing and payment dates. Affected taxpayers will now have until Oct. 16, 2023, to file various individual and business tax returns and to make tax payments. The relief expands upon previously issued IRS guidance relating to four distinct disasters and refers the taxpayers back to those announcements for specific information about affected areas and dates of coverage:
California
California severe winter storms, flooding and mudslides (FEMA-3591-DR). The IRS issued initial guidance on Jan. 10, 2023 (now updated) granting relief to individuals and households that reside or have a business in any of the following counties in California: Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo and Yuba.
This relief postpones various tax filing and payment deadlines that occur on or after Jan. 8, 2023, and before Oct. 16, 2023.
California severe winter storms, flooding, landslides and mudslides (FEMA-4683-DR). The IRS issued initial guidance on Jan. 24, 2023 (now updated) granting relief to individuals and households that reside or have a business in any of the following counties in California:
Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Los Angeles, Madera, Mariposa, Mendocino, Merced, Monterey, Napa, Nevada, P acer, Sacramento, San Benito, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, San Diego, San Francisco, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolmne, Ventura and Yolo.
This relief postpones various tax filing and payment deadlines that occur on or after Dec. 27, 2022 and before Oct. 16, 2023.
Alabama
Alabama severe storms, straight-line winds and tornadoes (FEMA-4684-DR). The IRS issued initial guidance on Jan. 19, 2023 (now updated) granting relief to individuals and households that reside or have a business in any of the following counties in Alabama:
Autauga, Barbour, Chambers, Conecuh, Coosa, Dallas, Elmore, Greene, Hale, Mobile, Morgan, Sumter and Tallapoosa.
This relief postpones various tax filing and payment deadlines that occur on or after Jan. 12, 2023 and before Oct. 16, 2023.
Georgia
Georgia severe storms, straight-line winds, and tornadoes 12 (FEMA-4685-DR). The IRS issued initial guidance on Jan. 19, 2023 (now updated) granting relief to individuals and households that reside or have a business in any of the following counties in Georgia:
Butts, Crisp, Henry, Jasper, Meriwether, Newton, Pike, Spalding and Troup
This relief postpones various tax filing and payment deadlines that occur on or after Jan. 12, 2023 and before Oct. 16, 2023.
The relief for all four disasters postpones various tax filing and payment deadlines that occur on or after the respective start dates listed above. Affected taxpayers will now have until Oct. 16, 2023, to file returns and pay taxes that were originally due during these periods. This includes individual returns and business returns due March 15, April 18, 2023 and tax-exempt organization returns normally due on May 15, 2023. The Oct. 16 deadline also applies to estimated tax payments normally due on Jan. 17, April 18, June 15, and Sep. 15, 2023. These payments are postponed to Oct. 16, 2023, for those taxpayers in the listed counties of the respective states. Quarterly payroll and excise tax returns normally due on Jan. 31, April 30 and July 31, 2023 are also postponed to Oct. 16, 2023. In addition, eligible taxpayers will also have until Oct. 16, 2023, to make year 2022 contributions to their IRAs and health savings accounts.
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 the respective disaster start date and before Oct. 16, 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 Disaster Designation in bold letters at the top of their return and include the FEMA disaster declaration number as indicated above 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.
