The recent disaster declaration issued by the Federal Emergency Management Agency permits the IRS to postpone certain tax-filing and tax-payment deadlines for affected taxpayers who reside or have a business in the covered disaster area.
Covered Disaster Area
Individuals and businesses that reside or have a business in Washtenaw and Wayne counties qualify for tax relief. Victims of Severe Storms, Flooding, and Tornadoes that began June 25, 2021 now have until November 1, 2021, to file various individual and business tax returns and make tax payments.
Postponement Period
Certain deadlines falling on or after June 25, 2021 and before November 1, 2021 are granted an extension of time through November 1, 2021.
This includes:
Quarterly payroll and excise tax returns ordinarily due August 2
Filing of Form 2290, Heavy Highway Vehicle Use Tax Return, normally due on August 31
Quarterly estimated income tax payments normally due September 15 (The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief)
Valid extension filings normally due on October 15
Filing of Form 5500 series returns that were required to be filed
Estimated tax payments that were due on or after June 25, 2021, and before November 1 will not be subject to penalties for failure to pay estimated tax installments as long as they are paid by November 1
Waiver of the usual fees and requests for copies of previously filed tax returns for affected taxpayers. You should put the assigned Disaster Designation "Michigan Severe Storms, Flooding, and Tornadoes" in bold letters at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, and submit it to the IRS.
Revenue Procedure 2018-58 - Time for performing certain acts postponed by reason of service in a combat zone or a federally-declared disaster, gives guidance about other time-sensitive actions that may be postponed.
The postponement of time to file and pay does not apply to:
Information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series
Forms 1042-S, 3921, 3922 or 8027
Employment and excise tax deposits, but penalties on deposits due on or after June 25, 2021, and before July 12, 2021, will be abated as long as the tax deposits were made by July 12, 2021.
People who receive a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date within the postponement period should call the telephone number on the notice to have the IRS abate the penalty. Affected individuals who are contacted by the IRS about collection or examination matters should explain how the disaster impacts them so that consideration can be given to their case.
Affected Taxpayers
Individuals who live, and businesses whose principal place of business is located, in the covered disaster area eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. People who are not in the covered disaster area, but whose records necessary to meet a deadline are in the covered disaster area, are also entitled to relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Affected individuals who reside or have a business located outside the covered disaster area should call the IRS disaster hotline at 866-562-5227 to request this tax relief.
Relief workers affiliated with a government or philanthropic organization assisting in the relief activities in the covered disaster area and individuals visiting the covered disaster area who were killed or injured as a result of the disaster are also entitled to relief. The relief described in section 17 of Rev. Proc. 2018-58 pertaining to like-kind exchanges of property also applies to certain individuals who are not otherwise affected taxpayers.
Deducting Casualty Losses
Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses not covered by insurance or other reimbursements have the option to claim them on either the return for the year the loss occurred (in this case, the 2021 return, normally filed next year), or the prior year return. Those claiming disaster losses on a 2020 return should put the Disaster Designation "Michigan Severe Storms, Flooding, and Tornadoes" in bold letters at the top of the form. Include the disaster declaration number, FEMA 4607-DR, on any return. See IRS Publication 547- Casualties, Disasters, and Thefts. for information on the tax treatment of casualties, thefts, and losses on deposits.
Resources:
Rev. Proc. 2018-58 - Time for performing certain acts postponed by reason of service in a combat zone or a federally-declared disaster.
Tax Relief in Disaster Situations page - find information on the most recent tax relief provisions for taxpayers affected by disaster situations
FAQs for Disaster Victims for information about the definition of an affected taxpayer.
For prior tax relief provided by the IRS in disaster situations based on FEMA's declarations of individual assistance, visit Around the Nation.