Tax relief for taxpayers in California affected by wildfires

Tax relief for taxpayers in California, wildfires

The IRS today issued a release announcing that certain taxpayers in California that were affected by wildfires (beginning date September 4, 2020) now have until January 15, 2021, to file individual and business tax returns and to make certain tax payments.

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As explained in the IRS release—IR-2020-237—the tax relief is available with regard to any area designated by the Federal Emergency Management Agency as qualifying for individual assistance, and includes the counties of Fresno, Los Angeles, Madera, Mendocino, San Bernardino, San Diego, and Siskiyou.

The IRS release notes:

  • Taxpayers in localities qualifying for individual assistance (if added later to the disaster area, elsewhere in the state and in neighboring states) will automatically receive the same filing and payment relief.
  • The tax relief postpones various tax filing and payment deadlines that occurred starting on September 4, 2020.
  • Affected individuals and businesses will have until January 15, 2021, to file returns and pay any taxes that were originally due during this period. For instance, individuals who had a valid extension to file their 2019 return due to run out on October 15, 2020, will now have until January 15, 2021, to file. This relief is separate from that provided for the California wildfires that began on August 14, 2020. Read TaxNewsFlash
  • Tax payments relating to these 2019 returns were due on July 15, 2020, and thus, these payments are not eligible for this relief.
  • The deadline of January 15, 2021, also applies to quarterly estimated income tax payments due on September 15, 2020, and the quarterly payroll and excise tax returns normally due on November 2, 2020.
  • The relief applies to tax-exempt organizations, operating on a calendar-year basis, that had a valid extension due to expire November 16, 2020.
  • Businesses with extensions also have the additional time including, among others, calendar-year corporations whose 2019 extensions expired October 15, 2020.    
  • In addition, penalties on payroll and excise tax deposits due on or after September 4 and before September 21, 2020, will be abated as long as the deposits are made by September 21, 2020.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late-filing or late-payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer is directed to call the telephone 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. 

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