The IRS has provided disaster relief for victims of the storms, tornadoes and flooding that took place starting on Dec. 10 in parts of Illinois and Tennessee. Affected taxpayers will now have until May 16, 2022, to file various tax returns and to make tax payments.
Disaster area.
Generally, the relief the IRS announced in IR 2021-252 applies to taxpayers who live or have a business (“affected taxpayers”) in
- Bond, Cass, Coles, Effingham, Fayette, Jersey, Macoupin, Madison, Montgomery, Morgan, Moultrie, Pike and Shelby counties in Illinois and
- Cheatham, Decatur, Dickson, Dyer, Gibson, Lake, Obion, Stewart, and Weakley counties in Tennessee (“disaster area”). However, the IRS will provide the same relief to any other localities designated by FEMA that were affected by the tornadoes.
Note.
Practitioners can find the current list of localities eligible for the disaster relief provided in IR 2021-252 on the IRS’s disaster relief webpage.
Disaster relief provided to affected taxpayers in Illinois and Tennessee.
For affected taxpayers in Illinois and Tennessee, the IRS has postponed various tax filing and payment deadlines that occurred starting on Dec. 10. As a result, affected taxpayers will have until May 16 to file returns and to pay any taxes that were originally due on or after Dec. 10, 2021, including
- 2021 individual income tax returns due on April 18, 2022, and
- Various business returns normally due on March 15 and April 18, 2022.
Note.
This means that, among other things, affected taxpayers will have until May 16, 2022, to make 2021 IRA contributions.
In addition, affected taxpayers who are farmers that choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022, to file their 2021 return and pay any tax due.
The May 16, 2022, extended deadline also applies to:
- Quarterly estimated income tax payments due on Jan. 18 and April 18, 2022 and
- Quarterly payroll and excise tax returns normally due on Jan. 31 and May 2, 2022.
Note.
This extension means that individuals can skip making their fourth quarter estimated tax payments due on Jan. 18 and April 18, and instead include that amount with their 2021 return, without incurring an estimated tax penalty, if they file that return on or before May 16, 2022.
In addition, the IRS will abate penalties on payroll and excise tax deposits due on or after Dec. 10 and before Dec. 27 if the deposits are made by Dec. 27, 2021.
How do affected taxpayers in Illinois and Tennessee get this relief.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area.
If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for a return, deposit, or payment that has an original or extended due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with taxpayers who don’t live or have a business in the disaster area but whose tax records are located in the disaster area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This postponement also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Claiming disaster losses.
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year, 2020 in this instance.
Affected taxpayers should write the FEMA declaration number – 3577EM for Illinois or 3576EM for Tennessee – on any return claiming a loss. See IRS Publication 547 for details.
To continue your research on election to deduct disaster losses in a preceding year, see FTC 2d/FIN ¶ M-2000 et seq.
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