IRS Extends Filing and Payment Deadlines for Texas

The IRS has announced that it is giving victims of severe winter storms in the Lone Star state a break: It is postponing various deadlines for individuals and businesses in that state until June 15, 2021.

Feb 24th 2021
Columnist
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The IRS said (TX-2021-02, 2/22/21) it will provide this special relief to the entire state of Texas, following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), But taxpayers in other states impacted by winter storms that receive similar FEMA disaster declarations are automatically in line for the same filing and payment relief.

The current list of eligible localities is available on the IRS disaster relief page. The extensions apply to tax filing and payment deadlines that occurred starting on February 11. As a result, affected individuals and businesses will have until June 15, 2021, to file returns and pay any tax that would otherwise be due during this period. This includes 2020 individual and business tax returns normally due on April 15 as well as 2020 business returns with a regular March 15 due date.

Furthermore, the June 15 deadline applies to quarterly estimated income tax payments due on April 15 and the quarterly payroll and excise tax returns normally due on April 30. This tax relief is also available to tax-exempt organizations operating on a calendar-year basis with a 2020 return due date of May 17.

Any penalties on payroll and excise tax deposits due on or after February 11 and before February 26 will be abated as long as the deposits are made by February 26.

Icing on the cake: Affected taxpayers will have June 15, 2021, to make IRA contributions for the 2020 tax year. Depending on income and whether the taxpayer actively participates in an employer retirement plan, these contributions may be wholly or partially deductible against 2020 tax liability. 

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers don’t need to contact the agency.

However, 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 falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS promises to work with any taxpayer living outside the disaster area who has records needed to meet a deadline located in the affected area. Taxpayers qualifying for relief who live outside the disaster area should contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Special rule: An individual or business in a federal disaster area that suffered an uninsured or unreimbursed disaster-related loss can choose to claim the loss on either the return for the year the loss occurred or the prior tax year. For instance, instead of waiting to claim a loss on a 2021 return, a Texas resident can benefit from the loss on a 2020 return filed this year. 

Visit the IRS disaster relief page for details on other returns, payments and tax-related actions qualifying for extended deadlines.

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