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Some Relief in the Weather?

While extreme storms in California usually only bring flooding, mudslides and evacuations, occasionally they bring some relief too.  Tax relief.

California residents currently being affected by the storms are being given an extension, to file their federal individual and business tax returns and make tax payments, the Internal Revenue Service AND the Franchise Tax Board have both confirmed. That extension date is May 15, 2023.

Who is this for?

This will apply to the areas appointed by Federal Emergency Management Agency (FEMA). So far they have included individuals and households that reside or have a business in the following counties:

  • Alameda
  • Colusa
  • Contra Costa
  • El Dorado
  • Glenn
  • Fresno
  • Humboldt
  • Kings
  • Lake
  • Los Angeles
  • Madera
  • Marin
  • Mariposa
  • Mendocino
  • Merced
  • 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
  • Ventura
  • Yolo
  • Yuba

If they decide affected areas exceed the above counties, they will update their list.  You can always see a current list on the disaster relief page on the IRS website, here.

What is this for?

This relief is for any and all tax filing and payment deadlines that occurred starting on Jan. 8, 2023.  This includes the following:

  • 2022 individual income tax returns, normally due on April 18
  • 2022 business returns that were normally due on March 15 and/or April 18
  • Making 2022 contributions to eligible taxpayers’ IRAs and health savings accounts
  • 2023 quarterly estimated tax payments, normally due January 17, 2023 and April 18, 2023
  • quarterly payroll and excise tax returns normally due on Jan. 31and April 30, 2023.
  • penalties on payroll and excise tax deposits due on or after Jan. 8, 2023, and before Jan. 23, 2023, provided the tax deposits are made by  23, 2023

This means that individual taxpayers can essentially skip making the fourth quarter estimated tax payment, normally due Jan. 17, 2023, and instead include it with the 2022 return they file, on or before May 15.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 15, 2023, to file their 2022 return and pay any tax due.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period might be 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.

What do I need to do?

You don’t need to DO anything! The IRS automatically provides this relief to any taxpayer with an IRS address or record located within the above-mentioned disaster area. If they don’t OR if you receive a notice of late fees assessed, you can call the number on the notice (or give us a ring to do it for you) and can have the penalty waived.

Claiming Losses

Individuals and businesses in a federally declared disaster 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). Be sure to write the FEMA declaration number – 3691-EM − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit the disaster assistance webpage or give us a call at our offices, we are here to help!!

p.s. We don’t just provide the numbers; we provide the big picture clarity! Click to schedule your free one on one call with one of our partners today!

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