The Internal Revenue Service announced that California storm victims now have until May 15, 2023, to file various federal individual and business tax returns and make tax payments. The IRS is offering relief to any current or future areas designated by the Federal Emergency Management Agency (FEMA). The current list of eligible localities is available on the disaster relief page on the IRS website. The tax relief postpones various tax filing and payment deadlines starting on January 8, 2023. As a result, 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 and various 2022 business returns ordinarily due on March 15 and April 18. Among other things, this means eligible taxpayers will have until May 15 to make 2022 contributions to their IRAs and health savings accounts.

The May 15, 2023, deadline also applies to the quarterly estimated tax payments, usually due on January 17, 2023, and April 18, 2023. This means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 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 new deadline also applies to the quarterly payroll and excise tax returns, normally due on January 31 and April 30, 2023. In addition, penalties on payroll and excise tax deposits 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. The IRS disaster relief page details other returns, payments, and tax-related actions qualifying for the additional time. The IRS automatically provides filing and penalty relief to taxpayers with an IRS address of record located in the disaster area. This means 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.

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 are located in the affected area. Taxpayers qualifying for relief living outside the disaster area must contact the IRS. This also includes workers assisting the relief activities affiliated with a recognized government or philanthropic organization. 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.

Talley’s team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on your assets and wealth to the next generation. We welcome the opportunity to discuss the current options available for you. For more information, contact us today.