Alert

IRS and California Defer Deadlines for Taxpayers Impacted by Wildfires

Several California counties impacted by wildfires were declared a major disaster by the Trump administration. The declaration authorized numerous sources of relief in the area including federal tax deadline relief.

The IRS has now issued IR-2020-191 and CA-2020-06 granting an extension of several upcoming tax deadlines to December 15, 2020. 

The California Franchise Tax Board (FTB) concurrently issued a news release confirming the state will automatically grant matching deadline relief.

Federal and California Deadlines Deferred

The IRS relief provides that individuals and businesses with tax filing and payment deadlines between August 14, 2020, and December 15, 2020, have until December 15, 2020, to file their returns and pay any taxes due.

The list includes:

  • Individual and corporate taxpayers who have a valid extension on file for their 2019 tax returns otherwise due on October 15, 2020
  • Tax-exempt organizations with a valid extension on file currently due to file their return on November 15, 2020
  • Partnership and S corporation returns with a valid extension on file; currently due on September 15, 2020
  • Trust returns with a valid extension on file; currently due on September 30, 2020
  • Quarterly tax estimates originally due on September 15, 2020
  • Quarterly payroll and excise tax returns normally due on October 31, 2020
  • Form 5500 series returns required to be filed on or after August 14, 2020 and before December 15, 2020
  • Time-sensitive actions described in Treas. Reg 301.7508A-1(c)(1) and Rev. Proc. 2018-50 IRB 990 that are due to be performed on or after August 14, 2020 and before December 15, 2020

Any tax payments related to calendar 2019 individual and corporate returns were due on July 15, 2020. As a result, those payments aren’t eligible for relief.

Penalties on payroll and excise tax deposits due after August 14 and before August 31 will be abated as long as deposits are made by August 31, 2020.The IRS disaster relief page has details on other returns, payments, and tax-related actions that qualify for additional time.

The state of California news release confirmed the FTB automatically conforms to IRS postponement periods for presidentially declared disasters. 

This automatic conformity includes all deadlines for:

  • Filing tax returns
  • Paying income taxes
  • Making contributions to a traditional individual retirement account (IRA) or Roth IRA

Affected Taxpayers

All taxpayers who reside or have a business in covered areas are affected taxpayers.

Applicable Counties

The federal disaster declaration applies to the following counties:

  • Lake
  • Monterey
  • Napa
  • San Mateo
  • Santa Cruz
  • Solano
  • Sonoma
  • Yolo

More counties could be added at a later date; check the FEMA site for updates.

California has granted relief for all of the above counties and will grant automatic relief for any counties added to the federal disaster declaration at a later date. 

Automatic Identification

The IRS will automatically identify taxpayers located in covered areas and apply filing and payment relief.

Taxpayers Outside the Area Who May Qualify

In addition, the IRS will work with any taxpayer who lives outside the disaster area, but has records located in the affected area that are necessary to meet a deadline during the postponement period.

Taxpayers who qualify for relief and live outside the disaster area need to contact the IRS at (866) 562-5227.

Other State Taxes

In addition to the deadline relief being provided by the state of California, some other states may conform automatically to an IRS deferral due to the major disaster declaration.

It’s important to check with each state to determine if a deferral is permitted.

We’re Here to Help

If you or your organization has been affected by the California wildfires, and you have outstanding questions about the deferral deadlines, please contact your Moss Adams professional.