Insurance estimates range from $42 billion to $57 billion in damage caused by Hurricane Ian, and these early figures were for property damage in Florida alone.1 Almost five million acres of agricultural land was impacted.2 Add onto that the loss of life and the lasting disruption of personal and business activities that extended through the Carolinas, and many consider Ian to have been the most destructive hurricane on record.
The IRS has acknowledged this disruption and extended filing and payment deadline to mid-February of this year. In fact, the IRS is providing filing and penalty relief automatically to any taxpayer with an IRS address of record located in the disaster area. So, taxpayers do not need to contact the IRS to get this relief, but it’s important to know the new deadlines and details.
Deadline Extensions
For starters, individuals and businesses affected by the hurricane now have until February 15, 2023, to file various tax returns and make tax payments. This includes the quarterly estimated tax payments normally due on January 17, 2023, as well as the quarterly payroll and excise tax returns normally due on October 31, 2022 and January 31, 2023. The IRS will also waive the usual fees and requests for copies of previously filed tax returns for affected taxpayers.3
This also means that individuals who had a valid extension to file their 2021 return (originally due to run out on October 17, 2022) will now have until February 15, 2023, to file. Because tax payments related to these 2021 returns were due on April 18, 2022, those payments are not eligible for this extension.
Also keep in mind that the extensions and other relief cover property based on residence in the affected areas, and businesses based on ownership and location of the business. There is no residence requirement for qualifying for business extensions.
Quarterly Estimated Taxes
The February 15, 2023, deadline extension also applies to quarterly estimated tax payments. Instead of being due on January 17, 2023. This includes quarterly payroll and excise tax returns normally due on October 31, 2022, and January 31, 2023. Businesses with an original or extended due date also have the additional time, including calendar-year corporations whose 2021 extensions would have run out on October 17, 2022.4
Casualty Losses
It’s also important for those affected by the hurricane to review their casualty losses. Individuals may be able to deduct personal property losses that are not covered by insurance or other reimbursements and have the option to claim disaster-related casualty losses on their federal income tax return for either the year in which the event occurred (2022), or the prior year. See IRS Publication 547 for details.5
Outside of Florida
Hurricane Ian caused substantial damage as it moved north of Florida, so the IRS is offering extensions in South Carolina and North Carolina as well.6
The tax relief postpones various tax filing and payment deadlines that occurred starting on September 25 in South Carolina and September 28 in North Carolina. Affected individuals and businesses will have until February 15, 2023, to file returns that were originally due during this period.
The dates for other extensions for filing and payment of taxes are the same for the Carolinas as they are for Florida.
The Takeaway
Talk with your financial advisor and tax professional about these extensions. They might affect your decisions regarding investments, business operations, and longer-term financial planning. While we hope you and your loved ones were not affected greatly by Hurricane Ian, we also wanted to make sure you’re aware of these extensions from the IRS.
Sources:
1 https://www.reuters.com/world/us/hurricane-ian-damage-death-toll-latest-snapshot-florida-impact-2022-10-03/
2 https://fred.ifas.ufl.edu/extension/economic-impact-analysis-program/disaster-impact-analysis/hurricane-ian-damage-assessments-2022/
3 https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-hurricane-ian-in-florida
4 https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-hurricane-ian-in-florida
5 https://www.irs.gov/forms-pubs/about-publication-547
6 https://www.nahb.org/blog/2022/10/tax-extension-for-hurricane-victims
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