The IRS announced on Thursday afternoon that victims of severe storms, straight-line winds, tornadoes and flooding that began March 25, 2021 will have the option for a tax deadline extension. Taxpayers now have until Aug. 2, 2021 to file various individual and business tax returns and make tax payments. “Affected taxpayer” means any individual whose principal residence is in the covered disaster area or any business entity or sole proprietor whose principal place of business is in the covered disaster area.
The designated counties qualify for tax relief: Campbell, Cannon, Cheatham, Claiborne, Clay, Davidson, Decatur, Fentress, Grainger, Hardeman, Henderson, Hickman, Jackson, Madison, Maury, McNairy, Moore, Overton, Scott, Smith, Wayne, Williamson, and Wilson counties.
The IRS postponed certain tax-filing and tax-payment deadlines for designated taxpayers in those counties falling on or after March 25, 2021 and before Aug. 2, 2021 are postponed through Aug. 2, 2021. This includes the May 17 deadline for filing 2020 individual income tax returns and paying any tax due. Taxpayers also have until Aug. 2 to make 2020 IRA contributions.
The Aug. 2, 2021 deadline applies to the first quarter estimated tax payment, normally due on April 15, and the second quarter payment normally due on June 15. It also applies to the quarterly payroll and excise tax returns normally due on April 30, 2021. In addition, it applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17, 2021. Also, penalties on deposits due on or after March 25, 2021 and before April 9, 2021 will be abated as long as the tax deposits were made by April 9, 2021.
Most clients will have no need for action, as the Crosslin team is working to be sure that any returns still due on Monday, May 17 are delivered to you or extended. If you are in the zone, the extension is automatic, so you will not need to sign or file anything next week. If your return is in progress and qualifies for extension because you are in the zone, it may not be completed by Monday, May 17 as we work with clients impacted by the declaration, but will be completed soon.
We are reaching out to affected clients who have large payments scheduled to see if you want us to attempt to reschedule your payment. Once a payment is scheduled with the IRS or state, there is a process to go through to move it, as it does not move automatically. If the payment has already processed, unfortunately, there is nothing that can be done to move it to August, and this close to the deadline, many will have processed.
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 that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
For more details on the tax relief, visit the IRS website. As we mentioned, most will not be affected, but if you have questions, contact the Crosslin tax team at (615) 320-5500. We are here to help!