Hurricane Ian Tax Relief

In the wake of Hurricane Ian, the Federal Emergency Management Agency (FEMA) designated all counties in the states of North Carolina, South Carolina, and Florida as disaster areas. Shortly afterwards, the Internal Revenue Service and the revenue departments for North Carolina, South Carolina and Florida announced tax relief available for all taxpayers in these states. The tax relief postpones the deadline to file various individual, business, and tax-exempt organization tax returns and to make certain tax payments. For North Carolina individuals and businesses, tax filings with deadlines falling on or after September 28, 2022 and before February 15, 2023 are postponed to February 15, 2023.

Individuals who extended their tax returns until October 17, 2022 now have until February 15, 2023 to file their tax returns. For our individual clients, unless we hear otherwise from you, we will continue to work towards the original October 17 deadline.

This does not apply to 2021 tax payments since they were due April 18. Any 2021 tax payments due will still be considered late and subject to penalties and interest. For individual clients who pay quarterly estimated taxes, any fourth quarter 2022 federal tax payment will now be due by February 15, 2023 instead of January 17, 2023. Since NC charges interest instead of a penalty on a late payment of estimated taxes, and interest cannot be waived in NC, the fourth quarter 2022 NC payment is due January 17, 2022.

Who is affected?

  • Individuals who live in NC, SC and FL.

  • Businesses, including tax-exempt organizations, whose principal place of business is located in NC, SC or FL.

  • Taxpayers who are not in these states but whose books and records are in one of these states.

  • All relief workers affiliated with a recognized government or philanthropic organization assisting in these states.

What types of tax returns are affected?

  • Form 1040 – Individual income tax returns.

  • Form 1040-ES – Individual estimated income tax payments.

  • Form 1120 – Corporation income tax returns.

  • Form 1120-S – S Corporation income tax returns.

  • Form 1065 – Partnership income tax return

  • Form 990 and 999-EZ – Exempt organization tax returns.

  • Form 5500 – Annual return of benefit plan

  • Form 941 for third and fourth quarters 2022

  • Form 940 for 2022

Which types of payments are affected:

  • Individual and business 2022 fourth quarter estimated income taxes

  • In NC, penalties on payroll and excise tax deposits due on or after September 28, 2022 and before Oct 13, 2022 will be abated as long as the deposits are made by Oct 13, 2022.

Other important information about this tax relief:

  • Information returns such as Forms W-2, 1099, 1098, and 8027 are not subject to the tax relief.

  • Taxpayers may deduct property losses on their tax returns, subject to limitations, that are not covered by insurance or reimbursements.

  • Taxpayers that realize a gain from receiving more insurance than the basis of the affected property may be able to defer gain recognition by reinvesting in qualified property in a timely manner.

  • The due date for making a contribution to a qualified retirement plan is included in the relief.

  • Tax relief may be provided to some taxpayers regarding the timing of certain like-kind exchanges of property under section 1031.

If you have any questions or need additional information regarding this tax relief, please contact our office.

Alex Lehmann