Hurricane Ian Tax Relief Available for Affected Taxpayers

 In IRS Problems, Tax Debt, Tax Filing

Last week, Hurricane Ian wreaked havoc upon the states of Florida, North Carolina, and South Carolina. My sincerest thoughts and prayers are with everyone who has experienced loss of life, health, property, and security associated with this hurricane and other recent disasters. Most readers of my blog are aware that I live in North Carolina, and by the time Ian arrived in my home state, it had been downgraded to a tropical storm. But given Ian’s massive size and strength, we still experienced the loss of 4 North Carolinians during the storm. The death toll in Florida (tallied at 99 lives lost at the time of this article) continues to rise as search, rescue, and recovery teams scour remote areas in pursuit of those missing and affected by the storm.

The significant impact of Ian combined with the timing of several important tax deadlines occurring on or around October 15, 2022, has prompted the IRS to issue guidance for affected taxpayers in Florida, North Carolina, and South Carolina. Though most of the tax relief provided for the three states is similar, there are slight differences in some of the applicable dates, due to differences in the FEMA disaster declaration periods.

Summary of IRS Tax Relief for Floridians

Here is a summary of some of the tax relief applicable to Floridians impacted by Hurricane Ian. If you feel any of these provisions may apply to you and would like to access more information, more detail is viewable at this link.

  • Who is entitled to relief
    • Individuals and households affected by Hurricane Ian that reside or have a business anywhere in the state of Florida.
    • Taxpayers not in the disaster area, but whose records necessary to meet a deadline are in the covered disaster area are also entitled to relief.
    • Individuals who visited the covered disaster area who were killed or injured as a result of the disaster are entitled to relief.
  • What relief is available: Certain tax-filing and tax-payment deadlines are extended for taxpayers who reside or have a business in the disaster area.
    • Individuals with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 were due on April 18, 2022, so late payments of 2021 income taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • C Corporations with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 corporate taxes were due on April 18, 2022, so late payments of 2021 taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • Payroll tax return filings due on October 31, 2022 and January 31, 2023 are extended through February 15, 2023.
    • Quarterly estimated tax payments due on October 31, 2022 and January 17, 2023 are extended through February 15, 2023.
    • Penalties on payroll and excise tax deposits due on or after September 23, 2022 and before October 11, 2022 will be abated as long as the tax deposits are made by October 11, 2022.
    • Taxpayers who itemize deductions have the option of claiming disaster-relief casualty losses on their return for either the year the event occurred or the prior year, provided that these losses were not reimbursed by insurance or other means.
    • Note- as of today’s date, these extensions of time do not apply to information returns in the W-2, 1098, or 1099 series.

Summary of IRS Tax Relief for North Carolinians

Here is a summary of some of the tax relief applicable to North Carolinians impacted by Hurricane Ian. If you feel any of these provisions may apply to you and would like to access more information, more detail is viewable at this link.

  • Who is entitled to relief
    • Individuals and households affected by Hurricane Ian that reside or have a business anywhere in the state of North Carolina.
    • Taxpayers not in the disaster area, but whose records necessary to meet a deadline are in the covered disaster area are also entitled to relief.
    • Individuals who visited the covered disaster area who were killed or injured as a result of the disaster are entitled to relief.
  • What relief is available: Certain tax-filing and tax-payment deadlines are extended for taxpayers who reside or have a business in the disaster area.
    • Individuals with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 were due on April 18, 2022, so late payments of 2021 income taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • C Corporations with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 corporate taxes were due on April 18, 2022, so late payments of 2021 taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • Payroll tax return filings due on October 31, 2022 and January 31, 2023 are extended through February 15, 2023.
    • Quarterly estimated tax payments due on October 31, 2022 and January 17, 2023 are extended through February 15, 2023.
    • Penalties on payroll and excise tax deposits due on or after September 28, 2022 and before October 13, 2022 will be abated as long as the tax deposits are made by October 13, 2022.
    • Taxpayers who itemize deductions have the option of claiming disaster-relief casualty losses on their return for either the year the event occurred or the prior year, provided that these losses were not reimbursed by insurance or other means.
    • Note- as of today’s date, these extensions of time do not apply to information returns in the W-2, 1098, or 1099 series.

Summary of IRS Tax Relief for South Carolinians

Here is a summary of some of the tax relief applicable to South Carolinians impacted by Hurricane Ian. If you feel any of these provisions may apply to you and would like to access more information, more detail is viewable at this link.

  • Who is entitled to relief
    • Individuals and households affected by Hurricane Ian that reside or have a business anywhere in the state of South Carolina.
    • Taxpayers not in the disaster area, but whose records necessary to meet a deadline are in the covered disaster area are also entitled to relief.
    • Individuals who visited the covered disaster area who were killed or injured as a result of the disaster are entitled to relief.
  • What relief is available: Certain tax-filing and tax-payment deadlines are extended for taxpayers who reside or have a business in the disaster area.
    • Individuals with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 were due on April 18, 2022, so late payments of 2021 income taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • C Corporations with a valid extension to file 2021 income taxes through October 17, 2022, now have until February 15, 2023 to file (i.e. late filing penalty is waived between those dates). However, tax payments for 2021 were due on April 18, 2022, so late payments of 2021 corporate taxes are not entitled to relief (thus, late payment penalties and interest still apply).
    • Payroll tax return filings due on October 31, 2022 and January 31, 2023 are extended through February 15, 2023.
    • Quarterly estimated tax payments due on October 31, 2022 and January 17, 2023 are extended through February 15, 2023.
    • Penalties on payroll and excise tax deposits due on or after September 25, 2022 and before October 11, 2022 will be abated as long as the tax deposits are made by October 11, 2022.
    • Taxpayers who itemize deductions have the option of claiming disaster-relief casualty losses on their return for either the year the event occurred or the prior year, provided that these losses were not reimbursed by insurance or other means.
    • Note- as of today’s date, these extensions of time do not apply to information returns in the W-2, 1098, or 1099 series.

Final Thoughts

In addition to the IRS tax relief available to affected taxpayers, be sure to check for any relevant state and local tax relief that may apply as well. Additionally, if you are an individual or business impacted by the hurricane, be sure to document your losses, reimbursements, medical expenses, and relocation expenses that may be necessary for tax return preparation, government assistance, or insurance claims.

Though it is understandable that tax considerations are not likely to be one’s primary concern when impacted by a hurricane, despite the relief offered by the IRS, if you have the ability to file on time (without imposing further hardship on your circumstances), I would highly recommend doing so, given that late payment penalty and interest continues to accumulate. Filing on time also allows for better tax planning for future periods and can prevent taxpayers from falling behind on payments.

If you would like to discuss the tax relief available by the IRS related to Hurricane Ian or other recent disasters, please contact me using the form below.

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