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The IRS announced that Texans who were affected by the winter storms will have until June 15, 2021, to file various individual and business tax returns and to make tax payments. Since the Federal Emergency Management Agency (FEMA) issued a disaster declaration, the IRS is providing relief to the entire state of Texas. Taxpayers in other states also impacted by the winter storms that similarly receive FEMA disaster declarations will automatically receive the same filing and payment extension. The current list of eligible localities is available on the disaster relief page on IRS.gov.

Extended Filing Deadlines

Affected individuals and businesses will have until June 15, 2021, to file tax returns and pay any taxes including 2020 individual and business returns normally due on April 15, as well as various 2020 business returns that were due on March 15. This also means affected taxpayers will have until June 15, 2021, to make 2020 IRA contributions. The new deadline also applies to quarterly estimated income tax payments due on April 15 and quarterly payroll and excise tax returns normally due on April 30. Additionally, the June 15 deadline applies to tax-exempt organizations operating on a calendar-year basis, that have a 2020 return due on May 17.

Payroll & Excise Taxes

This extension also means penalties on payroll and excise tax deposits due on or after February 11 and before February 26 will be abated as long as the deposits are made by February 26. The IRS disaster relief page has details on other returns, payments, and tax-related actions qualifying for the additional time.

Taxpayers whose address of record with the IRS is located within the disaster area will automatically receive filing and penalty relief so there is no need to contact the agency.  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 should call the number on the notice to have the penalty abated.

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. These taxpayers need to contact the IRS at 866-562-5227. Workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization are also included and should contact the IRS at the provided number.

Disaster-Related 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), or the return for the prior year (in this instance, the 2020 return). This means that taxpayers can, if they choose, claim these losses on the 2020 return they are filling out this tax season. Be sure to write the FEMA declaration number – 4586 − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

We are here to help. These IRS updates can become complicated and it is important to work with a CPA who is up to date on all these changing regulations. Contact us with any questions you may have.

Lori Lato Morales, CPA

Tax Partner in Charge

832-782-5924
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