California Storm Relief Update: Deadlines Pushed to October 16
California is conforming with IRS disaster relief. California residents in 51 counties now have until October 16, 2023, to file various federal and California individual and business tax returns and make tax payments.
The IRS has released a notice (IR-2023-33) which extends the tax filing and payment deadlines for tax year 2022 for residents and businesses in specific California counties identified in IRS notices CA-2023-01 and CA-2023-02. These notices were issued on January 10th and 24th respectively. The original notices had granted an automatic postponement for various tax filing and payment deadlines from January 8, 2023, to May 15, 2023, for California residents of counties designated by FEMA as “federally declared disaster areas” due to recent storms.
See the exception below for payroll tax returns and Form 1099-MISC and Form 1099-NEC (also known as information returns).
California Counties Listed as Federally Declared Disaster Areas
Individuals and businesses in the following counties qualify for federal tax relief.
| Alameda | Humboldt | Mono | San Diego | Sonoma |
| Alpine | Inyo | Monterey | San Francisco | Stanislaus |
| Amador | Kings | Napa | San Joaquin | Sutter |
| Butte | Lake | Nevada | San Luis Obispo | Tehama |
| Calaveras | Los Angeles | Orange | San Mateo | Trinity |
| Colusa | Madera | Placer | Santa Barbara | Tulare |
| Contra Costa | Marin | Riverside | Santa Clara | Tuolumne |
| Del Norte | Mariposa | Sacramento | Santa Cruz | Ventura |
| El Dorado | Mendocino | San Benito | Siskiyou | Yolo |
| Fresno | Merced | San Bernadino | Solano | Yuba |
| Glenn |
Individuals
For taxpayers in affected California counties whose individual returns were originally due April 18, 2023, those are now due October 16, 2023. Additionally, taxpayers can also make contributions to their IRAs and health savings accounts for 2022 until October 16, 2023. For quarterly estimated tax payments, the 4th quarter of 2022, originally due on January 17, 2023, can now be paid by October 16, 2023, or with Form 1040 if filed and paid by the same date. Moreover, the 1st, 2nd, and 3rd quarter of 2023 quarterly estimated tax, initially due on April 18, June 15, and September 15, 2023, can be paid by October 16, 2023, without any interest or penalty.
Individual Income Tax, Tax Balances Due, and Estimated Tax Payments
| INDIVIDUALS* | ORIGINAL DUE DATE | POSTPONED DUE DATE |
|---|---|---|
| 2022 Q4 1040-ES Payment | Jan 17, 2023 | Oct 16, 2023 |
| 2022 Form 1040 | Apr 18, 2023 | Oct 16, 2023 |
| 2022 IRA Contribution | Apr 18, 2023 | Oct 16, 2023 |
| 2022 H.S.A. Contribution | Apr 18, 2023 | Oct 16, 2023 |
| 2023 Q1 1040-ES Payment | Apr 18, 2023 | Oct 16, 2023 |
| 2023 Q2 1040-ES Payment | Jun 15, 2023 | Oct 16, 2023 |
| 2023 Q3 1040-ES Payment | Sep 15, 2023 | Oct 16, 2023 |
* Corresponding CA tax returns including applicable Franchise Tax payments.
Businesses
Under section 7508A, this IRS disaster relief also applies to many business tax returns. Business taxpayers in the declared counties have until October 16, 2023, to file most business tax returns including employment tax returns, corporate, S corporation, partnership, non-profit, trust, estate, gift, generation-skipping transfer tax, and Form 5500 series returns that have either an original or extended due date occurring on or after January 8, 2023, and before October 16, 2023.
Affected taxpayers that have payments related to any of the above business or other tax filings originally due on or after January 8, 2023, and before October16, 2023, are postponed through October 16, 2023, and will not be subject to penalties for failure to pay as long as such payments are paid on or before October 16, 2023.
Business, Estate, Trust, Gift, and Other Tax Filings
| BUSINESS, ESTATE, TRUST & GIFT, ETC* | ORIGINAL DUE DATE | POSTPONED DUE DATE |
|---|---|---|
| 2022 Form 1120-S | Mar 15, 2023 | Oct 16, 2023 |
| 2022 Form 1065 | Mar 15, 2023 | Oct 16, 2023 |
| 2022 Form 1120 | Apr 18, 2023 | Oct 16, 2023 |
| 2022 Form 1041 | Apr 18, 2023 | Oct 16, 2023 |
| 2022 Estate, Gift, FBAR, Other Tax Returns | Between Jan 8, 2023 & Oct 16, 2023 | Oct 16, 2023 |
| 2022 Fiscal Year Business and Other Tax Returns | Between Jan 8, 2023 & Oct 16, 2023 | Oct 16, 2023 |
* Corresponding CA tax returns including applicable Franchise Tax payments and PTET payments are also postponed until Oct 16, 2023
Payroll Tax and Form 1099-NEC & Form 1099-MISC
The IRS notices indicate the October 16 deadline also applies to the quarterly payroll and excise tax returns normally due on January 31, April 30, and July 31, 2023. But tax filing only, payroll tax deposits due after January 22, 2023, are still due timely.
Year-end tax filing obligations, namely W2s and 1099s, were not listed in Rev. Proc. 2018-58 as eligible for postponement. And IRS notice CA-2023-01 states “the postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; Forms 1042-S, 3921, 3922 or 8027; or employment and excise tax deposits.”
Payroll Tax, Form 1099s & Tax Filings
| PAYROLL TAX & 1099s* | ORIGINAL DUE DATE | POSTPONED DUE DATE |
|---|---|---|
| 2022 Q4 Form 941 Monthly deposit | Jan 15, 2023 | Jan 23, 2023 |
| 2022 Q4 Form 941 Monthly deposit | Jan 15, 2023 | Jan 23, 2023 |
| 2023 Q1 Form 941 3 day banking deposits | Jan 8 to Jan 22 | Jan 23, 2023 |
| 2022 Q4 Form 941 | Jan 31, 2023 | Oct 16, 2023 |
| 2022 Form 940 | Jan 31, 2023 | Oct 16, 2023 |
| 2022 Form W-2 & W-3 | Jan 31, 2023 | Jan 31, 2023 |
| 2022 Form 1099-NEC | Jan 31, 2023 | Jan 31, 2023 |
| 2022 Form 1099-INT | Feb 15, 2023 | Feb 15, 2023 |
| 2022 Form 1099-DIV | Feb 15, 2023 | Feb 15, 2023 |
| 2022 Form 1099-MISC, Box 8,10 | Feb 15, 2023 | Feb 15, 2023 |
| 2022 Form 1099-MISC, Box 1-7,9 | Mar 31, 2023** | Mar 31, 2023** |
| 2023 Q1 Form 941 | Apr 30. 2023 | Oct 16, 2023 |
| 2023 Q2 Form 941 | Jul 31, 2023 | Oct 16, 2023 |
* Corresponding CA payroll tax returns NOT including applicable EDD payments and
**2022 Form 1099-MISC, Box 1-7,9 due February 28, 2023 if not e-filed.
Other Federal Tax and Time Sensitive Deadlines
The IRS also gives affected taxpayers until October 16, 2023, to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2018-58, 2018-50 IRB 990 (December 10, 2018), that are due to be performed on or after January 8, 2023, and before October 16, 2023. Rev. Proc. 2018-58, which is 139 pages, consists primarily of lists of all actions eligible for postponement related to a federally declared disaster, such as 1031 exchange (see Section 6 and Section 17), S corporation elections, tax court and bankruptcy deadlines, etc.
IRS Collections and Audits
Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.
Determining Eligible Taxpayers & Businesses
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area, based on the zip code of the address. Therefore, taxpayers do not need to contact the IRS to get this relief. (See below for relief based on the tax preparer’s office.)
In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.
Tax Practitioners within Eligible Counties Provide Relief to Taxpayers
Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. For example, the taxpayer’s tax practitioner’s office, if located within a declared county, provides relief to the taxpayer. Taxpayers who live outside the disaster area qualifying for relief based on the location of the tax preparer’s office may contact the IRS at 866-562-5227 to notify the IRS of the applicable issues.
Our team recently contacted the IRS at the number above. If the tax preparer calls for the taxpayer or business, you either need Form 2848 on file, or be prepared to fax the form to the IRS personnel on the call. Request that the SSN or EIN of the taxpayer client be “flagged” in the IRS computer as eligible for the disaster relief postponement. For California storm relief related to IR-2023-33, be prepared to give them either of these two FEMA numbers on the phone: FEMA-4683-DR or FEMA-3591-DR.
The IRS agent we spoke to indicated that no further substantiation would be required, such as proving the tax preparer’s office was struggling with specific flood or storm damage issues. And if the taxpayer calls on their own behalf to have their IRS account flagged for disaster relief, they should be prepared to give the applicable SSN or EIN for the taxpayer or business, and the county and zip code of the tax preparer’s office, as well as the two FEMA numbers above.
Note: We have not heard back related to the best method for taxpayers who are out of the area to be flagged for California postponement relief related to the location of the tax preparer.
Penalties & Interest
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.
Business or individual taxpayers who are unable to meet the new expanded postponement deadlines due to specific circumstances related to this federally declared disaster may also request additional penalty abatement from the IRS for reasonable cause.
Generally, the IRS will not waive interest on tax payment obligations even if the related penalty is waived.
California Franchise Tax Board Notice of Tax Filing Relief Postponement
For reference, here is the announcement from the California Franchise Tax Board notifying taxpayers it will conform to most federal relief:
Tax Relief for Californians Impacted by Storms
Updated: March 2, 2023
California announced it will conform to the federal October 16, 2023, postponements listed in this document, including the March 15, 2023 (tax year 2022) PTET payment deadlines and June 15, 2023 (tax year 2023) PTET payment and election deadlines.
California offers paperless tax extensions for individual and business filers, therefor the postponed filing date to October 16, 2023, will mainly impact taxpayers who may owe taxes with their individual and business tax returns or extensions including PTET payments. The California notice also confirms the 4th quarter 2022 California estimated tax payments and the 1st, 2nd, and 3rd quarter 2023 estimated tax payments may be paid by October 16, 2023, without penalty. And payroll tax return deadlines have been postponed but not the obligation to make timely payroll tax deposits.
NOTE: California has not released any information related to waiving California sales tax filing or paying deadlines. It’s best to assume those deadlines are still in place and if businesses are impacted by the storms for specific damages consider requesting relief on a case-by-case basis.