All weather eyes recently, and understandably, have been on Florida, where on Aug. 30 Hurricane Idalia made landfall in the state's Big Bend area as a category 3 storm.
Idalia's winds damaged buildings and roads in Keaton Beach and other Gulf Coast enclaves near where the hurricane came ashore. Flooding was more widespread, with record storm surge and drenching rains reported hundreds of miles away.
The Federal Emergency Management Agency (FEMA) and Internal Revenue Service acted quickly, with a major disaster declaration and associated tax relief announced for most Sunshine State residents just days after the storm struck.
But people in states nowhere near Florida also are dealing with the aftermath of nontropical flooding.
Disastrous water levels in Alaska and Illinois also prompted the IRS to grant those communities tax relief. The Alaska floods began on May 12. Severe storms and flooding hit parts of Illinois on June 29.
Last month, the IRS announced tax relief for the affected residents, including an Oct. 31 deadline for a variety of tax responsibilities.
Affected areas: The relief applies to Alaska individuals who live or have a business in the regional educational attendance areas of Bering Strait, Copper River, Kuspuk, Lower Kuskokwim, Lower Yukon, and Yukon Flats.
The Illinois tax relief applies to Cook County individuals and business owners.
Delayed deadlines: The tax deadlines that have moved to Oct. 31, which is this weekend's By the Numbers figure, include —
This tax relief postpones filing and payment deadlines that were originally due between May 12 for Alaskan taxpayers or June 29 for Illinois filers and the new end of October due date. This postponement includes —
- Individual 2022 tax year income tax returns that had been extended to Oct. 16.
NOTE: The Oct. 31 deadline applies to the filing of extended 1040 forms only. Extension requests are granted for submission of tax forms; the extension does not delay payments. Any tax associated with 2022 filings was due by April 18, 2023, meaning those payments are not eligible for the delayed deadline. Penalties and interest will continue accrue on unpaid 2022 taxes.
- Quarterly estimated income tax payments for the 2023 tax year.
For Alaska filers, that is the second and third payments normally due on June 15 and Sept. 15.
For Illinois taxpayers, the estimated tax payment relief applies to the Sept. 15 1040-ES payment.
- Calendar-year partnership and S corporation returns with 2022 extensions that end on Sept. 15.
- Calendar-year corporations with 2022 extensions to Oct. 16.
Relief granted automatically: There's no need for affected Alaska or Illinois taxpayers to contact the IRS. The agency relies on its taxpayer database for disaster relief, meaning it automatically provides filing and penalty relief to any taxpayer whose IRS address of record is in the disaster area.
However, it is possible an affected taxpayer may not have an IRS address of record located in the disaster area. This could be the case, for example, where someone moved after filing their return and did not notify the IRS of their new address.
In these circumstances, affected taxpayers could receive a late filing or late payment penalty notice from the IRS for the postponement period. The 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 areas. These taxpayers should contact the IRS at (866) 562-5227.
This option also applies to workers assisting the relief activities provided through a recognized government or philanthropic organization.
Claiming a disaster tax deduction: In addition to the immediate tax relief, federal tax law allows those who've endured a major disaster the option to claim any uninsured losses as a tax deduction. You also get to decide on the tax year you use to make the claims.
I discuss this option in the all-too-frequent disaster declaration posts here on the ol' blog. You can find more about disaster claim filings in my post Considerations in making a major disaster tax claim.
But I do want to reiterate here the choice of tax year in claiming eligible disaster losses. You can claim qualifying losses in either the year the disaster occurred, or the previous tax year.
Affected Alaska and Illinois taxpayers who can claim disaster losses as an itemized tax deduction need to carefully determine whether to count them on their 2022 or 2023 tax returns.
Taxpayers in those states who got extensions to file 2022 returns can make the claims on that return now due by Oct. 31. If they've already filed their 2022 returns, but want to claim the losses for that year, they can amend that return and claim the losses on their Form 1040-X.
However, if it's better for them to claim disaster losses on their 2023 returns, then they can do that on that filing that's due by April 15, 2024.
FEMA declarations: Regardless of which tax filing you choose to make the disaster loss claim, the IRS has some instructions to help expedite the processing of the returns.
Illinois filers claiming disaster losses should put "Illinois, Severe Storms and Flooding" in bold letters at the top of their form. They also need to include the FEMA disaster declaration number DR-4728-IL.
Alaska taxpayers claiming a disaster loss should write "Alaska flooding" on their forms, as well as FEMA disaster declaration number DR-4730-AK.
You can read more about making major disaster loss tax claims in IRS Publication 547. The IRS' Disaster Assistance and Emergency Relief for Individuals and Businesses page also has more information on returns, payments, and tax-related actions for qualifying taxpayers.
Finally, you also might find these earlier blog posts of interest:
- Picking up the pieces after a major disaster
- Document your property for tax, insurance claims before storms hit
- Storm Warnings: Preparing for, recovering from, and helping those affected by natural disasters
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