The U.S. Internal Revenue Service (IRS) and California Franchise Tax Board (CA FTB) have extended the tax filing deadline for the majority of Californians to November 16, 2023, due to the severe natural calamities that occurred last winter. Originally, the spring deadlines were shifted to October 16.

Consequently, the majority of Californian individuals and businesses have been granted an extension until November 16 to submit their 2022 tax returns and settle any outstanding taxes. This extension applies to 55 out of 58 counties in California, with Lassen, Modoc, and Shasta being the exceptions. The IRS’s decision is grounded on three separate FEMA disaster proclamations that encompassed a series of winter-related catastrophes such as floods, landslides, and mudslides spanning several months.

Typically, the IRS offers relief measures, including the deferral of tax filing and payment deadlines, to regions identified as disaster zones by the Federal Emergency Management Agency (FEMA). Taxpayers residing in these designated areas are automatically granted these extensions, eliminating the need for individual requests. The IRS’s website maintains an up-to-date list of qualifying regions on its disaster relief page.

Which tax submissions and payments are covered by the November 16 extension?

The following are included:

• 2022 personal income tax filings and payments, which were originally due on April 18.
• 2022 contributions to IRAs and health savings accounts for eligible taxpayers.
• Quarterly projected tax payments initially set for April 18, June 15, and September 15.
• Partnership and S corporation returns for 2022, which were due on March 15.
• Corporate and fiduciary income tax filings and payments for 2022, initially due on April 18.
• Quarterly payroll and excise tax submissions originally scheduled for May 1, July 31, and October 31.
• Tax returns from tax-exempt entities for 2022, which were due on May 15.
• Other tax-related activities and payments also fall under this extension. More details can be found on the IRS’s disaster relief page.

Is any action required by taxpayers to take advantage of this relief?

No direct action is needed. The IRS will automatically grant extensions and waive penalties for taxpayers whose registered addresses fall within the disaster zones. However, if a taxpayer has recently relocated to the affected area post-filing, they might receive a penalty notice for the deferred period. In such cases, they should contact the IRS using the number provided on the notice to have the penalty waived.

Moreover, the IRS will collaborate with taxpayers residing outside the disaster zones but have essential records within the affected regions. Those who qualify for relief but live outside the affected areas should reach out to the IRS at 866-562-5227. This also pertains to individuals aiding in relief efforts linked with recognized governmental or charitable entities.

Additional Tax Provisions:

Taxpayers within the federally recognized disaster zones who have incurred uninsured or unreimbursed losses due to the calamities have the option to claim these losses either on their 2023 tax return or the previous year’s (2022) return. They have an extended period, up to six months post the federal tax return due date for the disaster year, to make this choice. More information is available in Publication 547.

Payments received from government agencies for essential personal, family, living, or funeral expenses, as well as for home repairs or replacements, are typically exempt from gross income. More details can be found in Publication 525.

Taxpayers participating in retirement plans or IRAs might be eligible for additional relief. They could qualify for special disaster distributions, which are exempt from the additional 10% early distribution tax and can be spread over three years. Hardship withdrawals might also be an option, with each plan or IRA having specific guidelines.

This tax relief initiative is a segment of the broader federal strategy to address the damages from these disasters, grounded on FEMA’s local damage evaluations. For more information on disaster recovery, one can visit disasterassistance.gov.

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