The rains hit California hard this month. As of this morning, millions of California residents are still under a flood watch with more rain in the forecast—at least 31 of the state’s 58 counties have been declared disaster areas. According to Gov. Gavin Newsom, at least 17 people died from the storms.
As we continue to hold California storm victims in our thoughts, the IRS is offering some filing relief. 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 area designated by the Federal Emergency Management Agency (FEMA). Taxpayers added later to the disaster area will automatically receive the same filing and payment relief.
Areas Eligible for Relief
Currently, the following areas are eligible for relief:
Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo and Yuba counties.
The list of eligible localities is available on the Tax Relief in Disaster Situations page on IRS.gov.
Individual Tax Deadlines
Here’s what the relief entails: tax filing and payment deadlines starting on January 8, 2023, will be pushed off until May 15, 2023. That means that tax returns and payments that were originally due during this period, including those 2022 tax year returns ordinarily due on the tax season filing deadline (April 18, 2023), will now be due on May 15, 2023. Since some deadlines are keyed off due dates, eligible taxpayers will have until May 15, 2023, to make 2022 contributions to their IRAs and health savings accounts.
The May 15, 2023, deadline also applies to 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.
Business Tax Deadlines
Various business tax deadlines are also affected, including those returns normally due on March 15, 2023, and quarterly payroll and excise tax returns normally due on January 31 and April 30, 2023. Relief also includes a waiver of late-deposit penalties for federal payroll and excise tax deposits normally 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.
Relief is Automatic for Most Taxpayers
The IRS automatically provides filing and penalty relief to taxpayers with an IRS address of record located in the disaster area—taxpayers do need not to contact the IRS to get this relief. However, if you receive a late filing or payment penalty notice from the IRS and are entitled to relief, you should call the number on the notice to have the penalty abated.
The IRS will work with any taxpayer who lives outside the disaster area but whose records are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227.
Casualty Loss Deductions
Individuals and businesses who suffered disaster-related losses not covered by insurance may be eligible for a tax break: the casualty loss deduction. You can choose to claim a casualty loss on either the return for the year the loss occurred (in this case, your 2023 return which you’ll file in 2024) or on an original or amended return for the prior year (that’s the 2022 tax year filed in 2023). Be sure to write the FEMA declaration number – 3691-EM − on any return claiming a loss.
For more details, check out the FAQS for disaster relief page on IRS.gov.
