Please note: This blog is current to the date of its publication, Friday, Feb. 26. For additional updates or assistance navigating these uncertain times, please contact us or visit our SST COVID-19 resource page.
Finally, a little good news for Texans! After being beat up by winter storms and utility companies, the Internal Revenue Service (IRS) has followed up FEMA disaster declaration #4586 with some tax relief.
Texans, as well as some non-Texans whose tax records are located within the disaster area (see Treasury Regulation 301.7508A-1(c)), now have until June 15 to file the following returns which were originally due between Feb. 11 and June 15:
- Form 1040
- Form 1120
- Form 1120S
- Form 1065
- Form 1041
- Form 706
- Form 709
- Form 990
- Form 5500
- Form 941
This grace period also includes any tax payment normally due within the same period, such as the first quarter estimated tax payment normally due on April 15. Again, this will mean that the due date for this payment, while delayed, will result in the April 15 estimated tax payment and the June 15 estimated tax payment being due simultaneously.
In addition, the final payment for any 2020 taxes owed will now be due June 15 instead of April 15. Taxpayers also have until June 15 to make their 2020 IRA contributions.
The postponement of filing and payment deadlines does NOT apply to the following, unless specifically listed in Revenue Procedure 2018-58:
- Form W-2
- Form 1094
- Form 1095
- Form 1097
- Form 1098
- Form 1099 Series
- Form 1042-S
- Form 3921
- Form 3922
- Form 8027
- Employment & Excise Tax Deposits
Additional relief has been made available to Texans in the deduction of 2021 casualty losses which exceed insurance reimbursement. The IRS is allowing the deduction on either the 2020 or 2021 tax return at the discretion of the taxpayer. To claim on the 2020 return, the taxpayer must include the following phrase at the top of the form in bold letters:
Texas – Severe Winter Storms, FEMA 4586
Details on deducting the casualty losses will be made available in Publication 547, which is currently unavailable as updates are in process.
In response to the recent storms and outages, Texas Comptroller Glenn Hegar announced that his agency is also extending the 2021 franchise tax reports from May 15 to June 15.
While the IRS will automatically identify and apply filing and payment relief to taxpayers located within the covered disaster area, affected taxpayers who reside or have a business located outside the covered area should call the IRS disaster hotline at 866-562-5227 to obtain similar relief.
All 254 Texas counties are included in this relief package.
Special thanks to SST Senior Tax Manager Rachel Alexander for providing the content for this post.