Don't Mess With Taxes

Hurricane Ida remnants arrive in the northeast United States in early September 2021. (Satellite image via National Oceanic and Atmospheric Administration/National Hurricane Center)

The effects of Hurricane Ida just keep coming.

Connecticut is the latest state where areas have been declared major presidential disasters. That makes them eligible for assistance from the Federal Emergency Management Agency (FEMA).

It also means the Internal Revenue Service is offering corresponding tax relief.

Certain Connecticut individual and business taxpayers now have until Jan. 3, 2022, to file various tax returns and make tax payments.

The disaster and tax relief are for those who encountered Ida's effects when the remnants of that category 4 hurricane reached the Nutmeg State on Sept. 1 and 2. Eligible taxpayers include those living in or with businesses in Fairfield and New London counties, including the Mashantucket Pequot Tribal Nation and the Mohegan Tribal Nation.

What's on the delayed tax list: The IRS says its tax relief applies to a variety of tax filings and payments that were due beginning on Sept. 1.

This includes taxpayers who extended their individual 2020 Form 1040 filing until Oct. 15. Those who missed that deadline now have until Jan. 3, 2022. Note, though, that since they should have paid any tax due when they got the extension by this year's May 17 Tax Day, penalties and interest are still accruing on any tax not paid back then.

The Jan. 3 deadline also applies to quarterly estimated income tax payments that were due on Sept. 15.

Business quarterly payroll and excise tax returns normally due on Nov. 1 also are part of the new postponement period. So, too, are businesses deadlines for, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on Sept. 15, and calendar-year corporations whose 2020 extensions ran out on Oct. 15.

The new 2022 deadline also applies to calendar-year tax-exempt organizations whose 2020 extensions run out on Nov. 15.

Not on the FEMA list…yet: Any jurisdiction added to the FEMA declaration will automatically receive the IRS relief.

Also, if you or your business is not in the current disaster areas, but you have records in those places that you need to meet a tax deadline occurring during the postponement period, contact the IRS toll-free at (866) 562-5227. The agency says it will work with you.

You don't need to call, however, to confirm your postponed tax deadline if you're in the declared disaster areas. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in such designations.

However, sometimes the word is slow to filter through the full IRS. So the agency says if you get a late filing or late payment penalty notice it and you qualify for the new Jan. 3, 2022, due date, call the number on the notice to have the penalty abated.

Don't overlook deduction potential: If you incur damages from a major disaster, you might be able to claim those as an itemized tax deduction. You also get the option of which tax year to use, either the one in which the disaster occurred or the prior year.

You can find more on this process are in my post on what to consider when making a major disaster tax claim.

Other disaster-delayed deadlines: Finally, Connecticut is the latest, but not the only, jurisdiction affected by Hurricane Ida.

The list below shows the extended filing due dates, in order of their new deadlines, for those in areas struck this year by disasters.

• Nov. 15, 2021, for victims of California wildfires;
• Dec. 15, 2021, for North Carolina taxpayers who dealt with remnant of Tropical Strom Fred; and
• Jan. 3, 2022, for those affected by Tennessee severe storms and flooding, as well as Hurricane Ida victims in just-added Connecticut, as well as in all of Louisiana, and parts of New Jersey, New York, and Pennsylvania.

The IRS' online disaster relief page has details on these and other disaster situations where relief has been granted.

You also might find these items of interest:

• Tracking down tax records to file a disaster claim
• IRS and other government resources can help you deal with a natural disaster
• Storm Warnings: Preparing for, recovering from & helping those affected by natural disasters

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