Last week, the Federal Government released guidance allowing certain federal tax filings and payments to be extended until February 15, 2023, for the victims of Hurricane Ian.
Even though Florida does not impose a state income tax, there has been no indication thus far that the filing deadline for the victims of Hurricane Ian, who have state income tax filing obligations in other states, has been extended. The lack of state income tax extensions for victims of Hurricane Ian may require additional compliance procedures to avoid penalties.
Who can obtain relief (i.e., affected taxpayer)?
Individuals and households affected by Hurricane Ian that reside anywhere in Florida qualify for tax relief. Businesses (including tax-exempt organizations) whose principal place of business is located anywhere in Florida can also obtain relief.
What is the new filing deadline for individuals that qualify?
Under section 7508A, the IRS gives affected taxpayers until February 15, 2023, to file most tax returns with either an original or extended due date occurring on or after September 23, 2022. The extended deadlines apply to the following federal returns:
- Estate and trust income tax returns;
- Partnership returns;
- S corporation returns;
- Trust returns;
- Estate, gift, and generation-skipping transfer tax returns;
- Annual information returns of tax-exempt organizations; and
- Employment and certain excise tax returns.
This relief also includes the filing of Form 5500 series returns that were required to be filed on or after September 15, 2022, and before February 15, 2023. Such forms are postponed through February 15, 2023, in the manner described in section 8 of Rev. Proc. 2018-58.
It is unclear at this time whether the penalty relief for late filing of 2019 and 2020 tax and information returns provided earlier this year in Notice 2022-36 will also be extended to February 15, 2023, for victims of Hurricane Ian.
Does the federal relief also extend the time to pay federal income tax?
Affected taxpayers with an estimated income tax payment originally due on or after September 23, 2022, and before February 15, 2023, will not be subject to penalties for failure to pay estimated tax installments as long as such payments are paid on or before February 15, 2023.
The February 15, 2023, deadline applies to the quarterly estimated tax payments, normally due on January 17, 2023, and to the quarterly payroll and excise tax returns, normally due on October 31, 2022, and January 31, 2023.
The IRS noted, however, that because tax payments related to these 2021 returns were technically due on April 18, 2022, those payments are not eligible for this relief. If you are an affected taxpayer and receive a late filing or late payment penalty notice from the IRS that has an original or extended filing payment or deposit due date that was after September 23, 2022, and before February 15, 2023, please reach out to your Withum tax professional for assistance.
State Income Tax Filings
There has been no official guidance regarding the extension of state income tax filing or payment due date for victims of Hurricane Ian. Therefore, the various state compliance forms’ original and extended due dates have remained unchanged. However, many states provide the ability to waive penalties if there is a reasonable cause which often includes a natural disaster. Every state will have to be examined individually to see if such penalty relief exists.