Taxpayers dealing with the fallout from wildfires in California and Hurricane Delta in Louisiana yesterday received some good news from the Internal Revenue Service. Following the Federal Emergency Management Agency’s disaster declarations for affected areas, the IRS is giving victims additional time to meet certain filing and payment deadlines.
What parts of California have been granted tax relief due to September wildfires?
Individuals and businesses in the following wildfire-affected California counties automatically have until January 15, 2021, to meet filing and payment deadlines that would have occurred on or after September 4, 2020:
- Fresno
- Los Angeles
- Madera
- Mendocino
- San Bernardino
- San Diego
- Siskiyou
What filing and payment deadlines in California are affected by the tax relief?
Deadlines beginning September 4, 2020, for individuals and businesses in affected California counties will be pushed back to January 15, 2021, including:*
- September 15, 2020 quarterly estimated income tax payment deadline
- October 15, 2020, individual tax return extension deadline
- October 15, 2020, calendar-year corporation extension deadline
- November 2, 2020 quarterly payroll and excise tax return deadline
- November 16, 2020, calendar-year tax-exempt organization extension deadline
As with other disaster-related tax relief, this list could grow, and affected taxpayers will not need to contact the IRS to receive updated filing and payment deadlines. Further, this tax relief also helps taxpayers who owe “penalties on payroll and excise tax deposits due on or after September 4 and before September 21.” If taxpayers in affected California counties make a deposit by September 21, 2020, the penalty will be abated.
That said, the IRS explains there are edge cases: “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 IRS also notes that “this relief is separate from that provided for the California wildfires that began on August 14,” directing taxpayers interested in more information about that tax relief to the announcement made on August 26.
What parts of Louisiana have been granted tax relief due to Hurricane Delta?
Individuals and businesses in the following hurricane-affected Louisiana parishes automatically have until February 16, 2021, to meet filing and payment deadlines that would have occurred on or after October 6, 2020:*
- Acadia
- Calcasieu
- Cameron
- Jefferson Davis
- Vermilion
If any of the included parishes were previously granted tax relief due to Hurricane Laura, they will now benefit from the updated filing and payment deadline.
What filing and payment deadlines in Louisiana are affected by the tax relief?
Deadlines beginning on October 6, 2020, for individuals and businesses in affected Louisiana parishes will be pushed back to February 16, 2021, including:
- October 15, 2020, individual tax return extension deadline
- October 15, 2020, calendar-year corporation extension deadline
- November 2, 2020, quarterly payroll and excise tax return deadline
- November 16, 2020, calendar-year tax-exempt organization extension deadline
- January 15, 2021, quarterly estimated income tax payments
- February 1, 2021, quarterly payroll and excise tax return deadline
Like the California tax relief, taxpayers will have certain penalties abated if they make a payment by the designated date. Louisianans living in affected areas with “penalties on payroll and excise tax deposits due on or after October 6 and before October 21, will [have those penalties] abated as long as the deposits are made by October 21, 2020.”
What deadlines are not affected by the tax relief for disaster victims in California and Louisiana?
Deadlines that occurred before the dates indicated in the IRS press releases are not affected by this tax relief, including—importantly—the July 15 tax payment deadline.
* These lists of affected deadlines are not exhaustive. Check the “Disaster Assistance and Emergency Relief for Individuals and Businesses” page on IRS.gov for links to more details.
Sources: IR-2020-236; IR-2020-237
Upstate Tax Professionals