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IRS: California Grants Tax Relief for Hurricane Victims

IRS: California Grants Tax Relief for Hurricane Victims
Ines Zemelman, EA
11 January 2023

The Internal Revenue Service (IRS) recently announced that individuals and businesses affected by recent storms in California will have an extended deadline to file federal tax returns and make payments. The relief applies to any area that has been designated by the Federal Emergency Management Agency (FEMA) as a disaster area, which includes a wide range of counties throughout the state.

The tax relief postpones various tax filing and payment deadlines that were set to occur starting on January 8, 2023. This means that affected individuals and businesses will have until May 15, 2023, to file returns and pay any taxes that were originally due during this period.

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.

Individuals and businesses in the affected area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2023 return normally filed next year), or the return for the prior year (2022, normally filed this tax season). They can do this by writing the FEMA declaration number – 3691-EM − on any return claiming a loss.

It's worth noting that the IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. 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 taxpayer should call the number on the notice to have the penalty abated.

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.

Ines Zemelman, EA
Founder of TFX