After ripping through Florida, Hurricane Ian turned left and slammed into the Carolinas. While the destruction in North and South Carolina wasn't as devastating as it was in Florida, there was plenty of damage done in those two states. As a result, federal disaster declarations were issued for both states. That also means tax relief is available to Hurricane Ian victims in the Carolinas in the form of extended tax filing and payment deadlines, a deduction for related losses, and fee waivers. (Relief was announced for Florida victims earlier.)
Extended Tax Deadlines
Taxpayers in North Carolina and South Carolina affected by Hurricane Ian will have until February 15, 2023, to file tax returns and make tax payments due between September 28 (for North Carolina victims) or September 25 (for South Carolina victims) and February 14. The extensions are available to anyone who lives in or has a business in the Carolinas. However, the IRS will offer the same relief to taxpayers in any other areas designated as a Hurricane Ian disaster area later.
The deadlines that are pushed back for Hurricane Ian victims include the October 17, 2022, due date for extended 2021 personal income tax returns. They are now due on February 15, 2023. (However, payments for 2021 income taxes that were due on April 18, 2022, are not extended.) Impacted corporations with a 2021 filing extension expiring on October 17 have until February 15 to file and pay taxes, too. Tax-exempt organizations also have more time to file 2021 returns originally extended through November 15.
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The quarterly estimated tax payment that's supposed to be paid by January 23, 2023, is now due on February 15. The due dates for quarterly payroll and excise tax returns normally due on October 31, 2022, and January 31, 2023, are extended to February 15, too. For South Carolina victims, penalties on payroll and excise tax deposits due from September 25 to October 9 are also waived as long as the deposits are made by October 10, 2022. For North Carolina victims, penalties due from September 28 to October 12 are waived if the deposits are in by October 13.
Taxpayers don't need to contact the IRS to get this relief. However, if an affected person receives a late filing or payment penalty notice from the IRS, he or she should call the number on the notice to have the penalty abated.
The IRS will also work with other people who live outside the disaster area but whose tax records are in the disaster area. Call the IRS at 866-562-5227 if you face this situation. This also includes relief workers affiliated with a recognized government or philanthropic organization, and anyone visiting the area who was killed or injured as a result of the disaster.
Casualty Loss Deduction
Hurricane Ian victims in the Carolinas may be able to claim a tax deduction for unreimbursed damaged or lost property. To do so, they typically must itemize and file Schedule A with their tax return. However, victims who claim the standard deduction may still be able to deduct their losses if they can claim them as business losses on Schedule C.
The deduction can be claimed on the tax return for the year the damage or loss of property occurred or for the previous year. So, for any personal property damage or losses in 2022, the deduction can be claimed on either a 2021 tax year return or a 2022 return. In either case, you must write the FEMA declaration number on the return claiming the deduction. For the Hurricane Ian victims in South Carolina, the number is DR-3586-NC. It's DR-3586-NC for North Carolina victims.
If you decide to claim a deduction for 2021, you can amend your 2021 return by filing Form 1040-X. For this purpose, you must file the amended return no later than six months after the due date for filing your return (without extensions) for the year in which the loss took place. So, for Hurricane Ian, you would need to file an amended 2021 return by October 16, 2023. Affected taxpayers claiming the disaster loss on a 2021 return should also put the Disaster Designation ("SC Hurricane Ian" or "NC Hurricane Ian") in bold letters at the top of the form. See IRS Publication 547 for details.
Fees Waived
The IRS will also waive fees for obtaining copies of previously filed tax returns for taxpayers affected by Hurricane Ian. When requesting copies of a tax return or a tax return transcript, write "SC Hurricane Ian" or "NC Hurricane Ian" in bold letters at the top of Form 4506 (copy of return) or Form 4506-T (transcript) and send it to the IRS.
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