The IRS has announced many Californians will qualify for federal tax relief in response to severe winter storms. (CA-2023-01, IR-202303.)
The Federal Emergency Management Agency (FEMA) issued a disaster declaration on January 8, 2023 for individuals and households that reside or have a business in these counties: 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, Stanislaus, Sutter, Tehama, Ventura, Yolo and Yuba. More counties could be added to the list later. They will be posted at the FEMA Disaster website https://www.fema.gov/disaster/declarations.
Those taxpayers qualify for the following tax relief. The relief is automatic and no application is necessary. Taxpayers who live or have businesses outside those counties can call the IRS disaster hotline at 1-866-562-5227 to request relief.
- The filing deadline for federal individual and business income tax returns (including Form 5500) with a due date on or after January 8, 2023 is extended to May 15, 2023.
- The extension to May 15, 2023 also applies to other federal tax returns, like gift tax returns, estate tax returns and excise tax returns, with normal filing dates from January 8 to May 14, 2023.
- The extension to May 15, 2023 also applies to other administrative matters otherwise required during the period January 8 to May 14, 2023, like making a 2022 contribution to an IRA or health savings account, or completing a tax-deferred exchange.
- The due date for federal estimated tax payments due on or after January 8, 2023 (January 17 and April 18, 2023 for individuals) is extended to May 15, 2023. The January 17 amount can just be included with an individual income tax return or extension payment by May 15, 2023.
- The due date for federal quarterly payroll tax returns normally due on January 31 and May 1, 2023 is extended to May 15, 2023.
- The extension does not apply to annual information tax return, such as Forms W-2, 1094, 1095, 1097, 1098 and 1099; to Forms 1042-S, 3921, 3922 or 8027; or to employment and excise tax payments. Penalties for employment and excise tax payments due from January 8 to January 22, 2023 will be abated provided they are made by January 23, 2023.
- Disaster losses may be claimed using Form 4684 with the tax return for the year of the loss (2023) or the previous year (2022.) Include the FEMA disaster declaration number, FEMA-3591-DR, and the Disaster Designation, “California, severe winter storms, flooding, and mudslides” in bold letters at the top of the form.
- The IRS will waive the usual fees for requests of copies of previously-filed tax returns for affected taxpayers. Request the copies using Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return. Include the FEMA disaster declaration number, FEMA-3591-DR, and the Disaster Designation, “California, severe winter storms, flooding, and mudslides” in bold letters at the top of the form.
The Franchise Tax Board hasn’t made an announcement yet about whether California will conform with the Federal tax relief. It usually does. See your tax advisor for updates about this.
Also see your tax advisor for help applying the relief measures or if the tax authorities send notices about the relief measures that you apply.