Even though Tax Day 2021 has come and gone, the Internal Revenue Service has decided to give some storm-struck West Virginians in the western part of the state more time to file their 2020 tax returns.
Sometimes even the Internal Revenue Service runs a bit late. That's the case with its announcement today, May 27, that some West Virginians now have a little more than a month to file their 2020 taxes. Until June 30, to be precise.
Yes, Tax Day this year was May 17, almost two weeks ago.
But apparently Uncle Sam is figuring that residents and business owners in Boone, Cabell, Kanawha, Lincoln, Logan, Mingo, and Wayne counties were too busy dealing with the aftermath of Feb. 27-to-March 4 severe storms and flooding to deal with their annual tax tasks.
OK, to be fair to the IRS, it can't make tax decisions related to disasters until the Federal Emergency Management Agency (FEMA) acts. FEMA's declaration wasn't issued until May 20.
That's why today the IRS announced that those affected West Virginians now have until the end of June to file their 2020 returns.
More time for individuals and businesses: Procedural issues between federal agencies aside, the bottom tax line is that some West Virginia filers who might have missed the COVID-delayed May due dates no longer have to worry about that.
The IRS' just-announced June 30 filing deadline applies to most tax returns. This includes, says the IRS, individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; annual information returns of tax-exempt organizations; and employment and certain excise tax returns.
All of those filers in those categories that have either an original or extended due date occurring on or after Feb. 27, when the storms systems struck the Mountain State, now have until June 30 to fulfill those tax obligations.
The federal tax relief includes not only pushing the annual tax return deadline to the end of June, but also gives affected taxpayers more time to make estimated tax payments for 2021. The new June 30 deadline applies to the first quarter estimated tax payment, normally due on April 15, and the second quarter payment normally due on June 15.
Affected individual filers also have until June 30 to make IRA contributions attributable to the 2020 tax year.
As for business taxpayers, the June 30 deadline applies to the quarterly payroll and excise tax returns that normally were due on April 30.
When to take, or not, additional action: If you or your business are in one of the seven West Virginia counties deemed a major disaster area by Federal Emergency Management Agency (FEMA), you don't need to take any special tax filing action.
The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief.
Taxpayers who don't live or have businesses in the covered disaster area, but whose records necessary to meet a tax deadline are within those boundaries also are entitled to the relief. So are all relief workers affiliated with a recognized government or philanthropic organization assisting in the disaster-assistance activities in the deemed disaster zone.
And if you live in or have a business outside the covered counties, but believe you, too, should get the extended tax relief, call the IRS disaster hotline toll-free at (866) 562-5227 to discuss your situation and request similar consideration.
Don't ignore notices: Then there's the matter of notices. Sometimes taxpayers in major disaster areas get a late filing or late payment penalty notice from the IRS even after the agency has decided they deserve more time.
That's definitely a possibility here with this late, post-Tax Day change to the filing deadline.
In these cases, don't panic. Where you have a tax payment or deposit that now has a later, disaster-related due date, call the telephone number on the notice to have the IRS abate the penalty.
More major disaster relief: Some West Virginia taxpayers with the new June 30 filing and payment deadline also will have another disaster-related tax decision to make.
Anyone who ends up in an area that FEMA designates as a major disaster can claim uninsured disaster losses on their taxes. And they get to decide in which tax year to claim them.
You can claim such losses on either the return for the actual tax year they occurred or the prior tax year. In picking your filing year, the key is to determine which tax year will provide you with a better tax result, generally a lower tax liability or larger refund.
That means affected West Virginia storm victims can claim the late February disaster losses on their 2021 tax return they file next year. Or they can claim them on their 2020 returns that now aren't due until June 30.
Those who were able to meet the May 17 deadline but now want to claim the losses on their already filed 2020 return will need to file an amended return. This is done by completing Form 1040X (and yes, you now can do so electronically!) and sending it to the IRS after your original 2020 return has been processed.
Another form to file: As I noted in my earlier post on considerations in making a major disaster tax claim, regardless of which tax year you choose to file your losses, you'll do on IRS Form 4684, Casualties and Thefts. It's then submitted with your 2020 tax year or 2021 tax year Form 1040.
To ensure that the IRS, which is already backlogged and slow getting to many (OK, millions of) returns, gets to your disaster claims as soon as possible, include the FEMA designation number on your return.
West Virginia taxpayers claiming a disaster loss in connection with the recent storms should put the disaster designation "West Virginia – Severe Storms and Flooding" in bold letters at the top of their Form 1040. Also, include the official designation number FEMA DR-4605-WV on the return.
IRS Publication 547 has more details on disaster claim filings. The tax agency's special IRS disaster relief page also has details on other returns, payments and tax-related actions qualifying for the additional time.
And, shameless plug alert, you also can find disaster tax tips, ranging from preparation steps to recovery options to how to help those in need, in the ol' blog's special Storm Warnings pages.
And then there were seven: As I noted in my May 15 post about similar tax relief for disaster victims in Tennessee, this already has been a wild year for disasters that have impacted filing deadlines.
Just a couple of weeks ago, residents in six states got extended filing deadlines. Now that relief total is seven. The IRS extended deadlines affect individuals and businesses in:
- All of Texas, Oklahoma and Louisiana, who have until June 15 to file and pay;
- Parts of Kentucky, who have until June 30 to file and pay;
- Parts of West Virginia, who now also have until June 30 to file and pay;
- Parts of Tennessee, who have until Aug. 2 to file and pay federal taxes; and
- Parts of Alabama, who also have until Aug. 2 to file and pay.
To all these taxpayers dealing with disaster damage, carefully consider how the tax code can help with your storm recovery. You want to make sure you get the most relief you can.
And I say this all the time, but I sincerely hope you don't ever need to use any of my blog tips or IRS tax relief in connection with a natural disaster. But I've been blogging long enough and obsessing about destructive weather for even longer. Sometimes — too many times — Mother Nature just throws a destructive fit.
You also might find these items of interest:
- Disaster season 2021 is here. Get ready!
- A pre-disaster inventory can pay off when filing insurance or tax claims
- IRS and other government resources can help you deal with a natural disaster