The Internal Revenue Service (IRS) is extending the tax filing deadline to victims of the April storms and tornadoes.
The extension applies to certain counties in Mississippi, South Carolina, and Tennessee and gives residents in those impacted areas until October 15, 2020, to file various individual and business tax returns and make tax payments.
The IRS is using areas designated by the Federal Emergency Management Agency (FEMA) as its basis for qualifying for the extension. At present, those counties include:
Mississippi: Clarke, Covington, Grenada, Jasper, Jefferson Davis, Jones, Lawrence, Panola and Walthall counties.
South Carolina: Aiken, Barnwell, Berkeley, Colleton, Hampton, Marlboro, Oconee, Orangeburg and Pickens counties.
Tennessee: Bradley and Hamilton counties.
If any county or locality is added to the disaster area list, the IRS says those residents will automatically receive the same filing and payment relief. If you live in South Carolina, Mississippi, or Tennessee, you should make a note to check the list of eligible localities on the disaster relief page on IRS.gov, weekly.
The fine print
The IRS notes that there are some specific items taxpayers should pay attention to, including:
Dates: Any individual or business affected by the storms and lives in the approved locales still have to file returns and pay any taxes that were originally due on April 15. This includes 2019 individual and business returns that, due to COVID-19, were due on July 15.
IRA contributions: The extension also means that affected taxpayers will have until October 15 to make 2019 IRA contributions.
Estimated tax payments: The October 15 deadline also applies to estimated tax payments for the first two quarters of 2020 that were due on July 15 and the third quarter estimated tax payment normally due on September 15. This also includes any quarterly payroll and excise tax returns normally due on April 30 and July 31.
Penalties due: If you had penalties on payroll and excise tax deposits due on or after April 12 and before April 27, they will be abated as long as the deposits were made by April 27.
Uninsured or unreimbursed disaster-related losses: For any individual or business in a federally declared disaster area that suffered uninsured or unreimbursed disaster-related losses, they can choose to claim them on either the return for the year the loss occurred (in this instance, the 2020 return normally filed next year) or the return for the prior year.
Do not contact the disaster agencies: The IRS says it automatically provides filing and payment relief to any taxpayer with an IRS address of record located in the disaster area. The agency says taxpayers in those areas do not need to contact the agency to get this relief. However, there is one hitch. 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 decreased.
Put a note on any return claiming a loss: The IRS asks people in affected areas to write the appropriate FEMA declaration number on any return claiming a loss. The numbers are 4536 for Mississippi, 4541 for Tennessee, and 4542 for South Carolina. See Publication 547 for details.
Living outside affected areas but doing business within them: There are certain instances where a taxpayer may live outside the affected area but does business in one of the disaster zones. In those cases, the IRS says it will work with taxpayers in extending the deadline. Those taxpayers who want to qualify for relief should contact the IRS at 866-562-5227.