Hurricanes Fiona and Ian covered several states and/or territories. They have since been declared disasters by the Federal Emergency Management Agency (FEMA). The IRS has provided relief for the taxpayers in the areas designated by FEMA. The areas that will see relief are Puerto Rico, Florida, North Carolina, and South Carolina.
Individuals that have residences in and taxpayers that have businesses anywhere in the Commonwealth of Puerto Rico, North Carolina, South Carolina or Florida will be allowed the relief given by the IRS. The IRS will automatically apply relief to those taxpayers based on their addresses. There will also be relief to taxpayers that are not located in the designated areas, but whose records to meet the filing requirements are in the affected areas. In the latter case, the taxpayer will be required to contact the IRS upon receiving any notices or correspondence to receive the relief. The IRS will not automatically grant the relief.
The relief includes tax filing and payment deadline changes. Due dates that are relevant to the relief are due dates starting September 17th in Puerto Rico, September 23rd in Florida, September 25th in South Carolina, and September 28th in North Carolina and ending February 15, 2023.
Individuals who had a valid extension will have until February 15, 2023, to file their 2021 Personal Income Tax Return. It should be noted that since payments for the 2021 Personal Income Tax Returns were due April 15, 2022, there will not be automatic relief from those penalties.
Under 7508A, the IRS is allowing until February 15, 2023, to file most tax returns. The returns include:
- Individual
- Corporate
- Estate and trust
- Partnership
- S-corporation
- Gift and generation skipping transfer tax returns
- Annual information returns of tax-exempt organizations
- Employment
- Certain excise tax returns
- Form 5500 series returns
The new deadline applies to quarterly estimated tax payments due during this time frame (January 2023) and quarterly excise and payroll taxes due during this time frame (October 2022 and January 2023). Penalties on payroll and excise taxes due after the start dates listed will be abated as long as the deposits were made by October 13, 2022.
Taxpayers in a federally declared disaster area who suffered an uninsured or unreimbursed loss have two options for claiming relief. They may file the loss in the year the loss occurred (2022 – to be filed next year) or the year prior (2021 tax year).
For more information, contact Michele Loretto, CPA, Manager, Small Business Department/Tronconi Segarra & Associates, at 716.633.1373 or mloretto@tsacpa.com.
