The damage Mother Nature can do is long-lasting. So, in the case of many storms, is the clean-up process.
The Internal Revenue Service realizes this. Earlier this year, the agency extended original tax relief, including filing deadlines, it provided individuals and businesses in Alabama, California, and Georgia that were hit by major natural disasters.
New York storm victims now have joined this group.
A deadly winter snowstorm hit parts of the Empire State around last Christmas. The Federal Emergency Management Agency (FEMA) and the IRS followed up quickly with, respectively, disaster declarations and tax relief for Erie and Genesee counties. Subsequently, the designations for the devastating Dec. 23-28, 2022, blizzard expanded to Erie, Genesee, Niagara, St. Lawrence, and Suffolk counties.
A month later to pay taxes: Now taxpayers in those counties now 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 that were due on March 15 and are coming due April 18.
Farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 also have until May 15 to file their 2022 returns and pay any tax due.
Other extended tax-related actions: Beyond filing a 2022 tax return, several other tax-related dates also are extended until mid-May.
Affected New York individual taxpayers who missed the Jan. 17 deadline for the final fourth quarter estimated tax payment for the 2022 tax year now have until May 15 to do so.
The new May due date also applies to affected New York businesses that must pay quarterly payroll and excise taxes, usually due on Jan. 31 and April 30. In addition, penalties on these business tax deposits due on or after Dec. 23, 2022, and before Jan. 9, 2023, will be abated as long as the tax deposits were made by Jan. 9, 2023.
In addition, eligible taxpayers also now have until May 15 to make 2022 contributions to their IRAs and health savings accounts (HSAs).
The IRS also urges disaster-affected New York taxpayers who realize that the May 15 deadline won't do them that much good to file for an extension. If you do so by the regular April 18 Tax Day, you can submit Form 4868 electronically. However, after April 18 and before May 15, disaster area taxpayers must file their extension requests by completing a paper form and snail mailing it to the IRS.
Penalty relief process: The IRS automatically provides filing and penalty relief to any taxpayer whose IRS address of record is in the disaster area. So you don't have to contact the agency to get the relief.
If, however, an affected taxpayer receives an IRS late-filing or late-payment penalty notice in connection with the extended filing, payment, or deposit due date, that taxpayer should call the number on the notice to have the penalty abated.
In addition, 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 located in the affected area. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. If that's you, call the IRS toll-free at (866) 562-5227.
Other tax relief options: Federal tax law also provides those who've endured a major disaster the option to claim any uninsured losses as a tax deduction. And you get to decide which tax year to use to make the claims.
This option is discussed in my January post on the first New York winter storm tax relief. Scroll down to the "Special disaster filing relief" section for more.
But I do want to reiterate here the tax year choice. Affected New York taxpayers who can claim losses as an itemized tax deduction need to carefully determine whether to count the winter storm losses on their 2022 returns since it happened last year, or to claim them in the prior 2021 tax year.
Run the numbers carefully. All tax and financial factors need to be examined, such as your current and prior year's tax bracket, and any other deductions you may be able to claim in either year. Obviously, you want to use the tax year that produces the better tax results.
Making the filing year decision will take some time and added calculations, but the difference could be substantial. So don't rush it. Get an extension to file if you need. Also consider professional tax advice to help you sort through the options.
Finally, regardless which tax year you use, when you file any disaster-related tax form, include the official declaration number, which is DR-4694-NY. This notation will let the IRS know to give the filing expedited treatment
You also might find these items of interest:
- Considerations in making a major disaster tax claim
- IRS and other government resources can help you deal with a natural disaster
- Storm Warnings: Preparing for, recovering from, and helping those affected by natural disasters
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