Federal Tax Deadlines are Extended Due to Hurricane Lee

The IRS announced in a news release this week that it will extend certain federal tax return filing and tax payment deadlines for filers in Maine and Massachusetts who were affected by Hurricane Lee. In most cases, those taxpayers have until February 15 of 2024 to file returns and make payments.

Who does this federal tax relief apply to?

The relief applies to “individuals and households that reside or have a business” anywhere within the states of Maine and Massachusetts. The relief is automatic, and allows federal individual, corporate, partnership, and exempt organization income tax returns that normally would be timely filed if filed on or after September 15, 2023, but before February 15, 2024, to instead be considered timely filed if filed by February 15, 2024.

The same federal tax relief applies to routine payments of federal tax normally due during that five-month period, such as payment of quarterly estimated tax. (Third and fourth quarter payments for calendar-year filers fall within this period.) The relief also applies to federal payroll tax, but one unique deviation from the length of the deferral involves payroll and excise tax deposits that were due on or after September 15, 2023, and before October 2, 2023. Rather than February, those deposits are due by October 2, 2023.

What filings do not apply for the deadline extension?

Note that this relief applies only to filings and payments that legitimately were due during this five-month period; it does not apply to all action taken during this period. By example, if an individual filed a routine extension prior to the April 2023 deadline for filing a 2022 Form 1040, that step would have caused the 1040 to be due by the middle of next month. This new federal tax relief extends that deadline further to February 15 of next year.

However, someone who failed to obtain an extension back in April and has not yet filed Form 1040 cannot utilize this new relief just by filing by February 15 of 2024. The relief does not apply because absent the regular extension, the April 2023 deadline still applies, and it is outside of the five-month window. (The return was tardy entering the new five-month grace period, and it therefore is not eligible for the new relief.)

The same analysis applies to tax payments: As long as the payments properly would have been due during the five-month window, payment by February 15, 2024, will be considered timely. (Again, note the shorter deferral applicable to certain payroll tax deposits described above.)

Also note that this is a federal concession: the relief applies only to federal returns and federal tax. Although reasonable to expect that the state tax authorities may offer comparable relief, until and unless that materializes, state and local tax returns and payments of state-imposed taxes remain due when originally scheduled.

A potential stormy outcome

While there was some damage inflicted by Hurricane Lee, including three unfortunate deaths on the east coast (one victim lived in Maine), the widespread damage predicted in some forecasts did not materialize. However, in New England, the governors of Maine and Massachusetts declared states of emergency, and those two states are recipients of the IRS’ February extension relief. Although technically available to any who meet the criteria described above, this federal tax relief obviously is intended to benefit those who need it.

In many cases, taxpayers, their accountants, and the IRS will be ill-served by processing 2022 tax returns five months from now when the filing season for 2023 returns is in full swing. At BNN, our plan is to finalize our clients’ returns and make recommendations for payments on a timeline unfettered by unnecessary delays, observing the original deadlines to the extent possible. More details of this relief program can be found in IRS news release IR-2023-177.

For more information, please contact Stanley Rose or your BNN advisor at 800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

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