California storm victims get a month of tax relief

Victims of storms in California now have until mid-May 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. Individuals and households that reside or have a business in the 31 California counties qualify.

The counties are 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.

Other areas added later to the disaster area will qualify for the same relief. The current list of eligible localities is on the IRS Tax Relief in Disaster Situations page.

The relief postpones various tax filing and payment deadlines that occurred starting on Jan. 8, 2023. Affected individuals and businesses will have until May 15 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, as well as various 2022 business returns normally due on March 15 and April 18.

Eligible taxpayers also have until May 15 to make 2022 contributions to their IRAs and health savings accounts.

Farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will also now have until May 15 to file their 2022 return and pay any tax due.

The May deadline also applies to the quarterly estimated tax payments, normally due on Jan. 17 and April 18. Individual taxpayers can skip making the fourth quarter estimated tax payment (normally due Jan. 17) and instead include it with the 2022 return they file on or before May 15.

The May deadline also applies to the quarterly payroll and excise tax returns normally due on Jan. 31 and April 30 this year. Penalties on payroll and excise tax deposits due Jan. 8 to Jan. 23 will be abated as long as the tax deposits are made by Jan. 23.

The IRS automatically provides filing and penalty relief to any taxpayer with an address of record located in the disaster area; taxpayers do not need to contact the agency. 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 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 in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to call (866) 562-5227. This includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

The IRS Disaster Assistance and Emergency Relief for Individuals and Businesses page has details on other returns, payments and tax-related actions qualifying for the additional time.

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 or the return for the prior year. They should write the FEMA declaration number (3691-EM) on any return claiming a loss.