The IRS announced Tuesday that certain California taxpayers affected by the recent flooding and rains can postpone making income tax payments and filing income tax returns until May 15, 2023.  

The deferral applies to Federal income tax payments and Federal income tax returns, normally due between January 8, 2023 – May 15, 2023. This includes 4th quarter personal estimated tax payments, usually due January 15, 2023 and personal income tax filing or extension payments, typically due April 15, 2023—both can be deferred until May 15, 2023.  

Taxpayers who reside in or have a business in the following counties are eligible for this relief: 

Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo, and Yuba 

Additionally, this announcement means that IRA and HSA contributions can also be deferred to May 15, 2023.  

Farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will have until May 15, 2023 to file their 2022 return and pay the tax due. 

The May 15 deadline also applies to the quarterly payroll and excise tax returns, normally due on January 31, 2023. In addition, penalties on payroll and excise tax deposits due on or after January 8, 2023, and before January 23, 2023, will be abated as long as the tax deposits are made by November 22, 2023. 

While the IRS has indicated it will update its computer system automatically to identify taxpayers who reside in these counties, there is a likelihood that erroneous notices may be issued or underpayment penalties calculated. If that occurs, the IRS announced that it would automatically waive any penalties or fees by calling 866-562-5227.  

This is a welcome relief for taxpayers living in a rain-soaked and flooded state. However, as of today, the state of California has not conformed to this announcement and still maintains traditional payment dates and filing dates: January 15, 2023 for 4th quarter estimated tax payments and April 15, 2023 for tax return/extension payments.  

Aldrich Advisors will continue to provide updates with additional relief as it becomes available. If you or your business were directly affected by the heavy rains or flooding, please contact your Aldrich Advisor to discover what aid and tax extensions may be available.