The IRS has granted victims of the recent severe storms in Arizona more time to file various individual and business tax returns and make tax payments. Specifically, victims of the storms on July 17 and 18, 2022, have until November 15, 2022, to file and pay tax returns and payments due between July 17 and November 14.
The tax relief is available to anyone in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. At this point, only affected taxpayers who live or have a business in the Salt River Pima-Maricopa Indian Community qualify for the extensions, but the IRS will offer the same relief to any taxpayers in other Arizona localities designated by FEMA later.
The IRS will also work with other people who live outside the disaster area but whose tax records are in the disaster area. Call the IRS at 866-562-5227 if you face this situation. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
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Deadlines Extended
The deadlines that are pushed back include extended 2021 personal income tax returns that were supposed to be due on October 17, 2022. However, payments for 2021 income taxes that were due on April 18, 2022, are not extended. In addition, Arizona storm victims in the designated area get more time to make the estimated tax payments due on September 15, 2022.
The due date for quarterly payroll and excise tax returns normally due on August 1 and October 31, 2022, are extended to November 15, too. Penalties on payroll and excise tax deposits due from July 17 to 31 will also be waived as long as the deposits were made by August 1, 2022.
Businesses with an original or extended income tax due date within the affected time period also have more time to file and pay taxes. This includes partnerships and S corporations with 2021 tax year extensions expiring on September 15, and corporations with an extension expiring on October 17.
Taxpayers don't need to contact the IRS to get this relief. However, if an affected person receives a late filing or late payment penalty notice from the IRS, he or she should call the number on the notice to have the penalty abated.
Deduction for Damaged or Lost Property
Victims of the Arizona severe storms in July may be able to claim a tax deduction for unreimbursed damaged or lost property. To do so, they typically must itemize and file Schedule A with their tax return. However, victims who claim the standard deduction may still be able to deduct their losses if they can claim them as business losses on Schedule C.
The deduction can be claimed on the tax return for the year the damage or loss of property occurred or for the previous year. So, for any destruction in 2022, the deduction can be claimed on either a 2021 tax year return or a 2022 return. In either case, you must write the FEMA declaration number on the return claiming the deduction. For the recent Arizona storms, the number is DR-4668-AZ.
If you decide to claim a deduction for 2021, you can amend your 2021 return by filing Form 1040-X. For this purpose, you must file the amended return no later than six months after the due date for filing your return (without extensions) for the year in which the loss took place. So, for Arizona storm losses in 2022, you would need to file an amended 2021 return by October 16, 2023. Affected taxpayers claiming the disaster loss on a 2021 return should also put the Disaster Designation ("Arizona Severe Storms") in bold letters at the top of the form. See IRS Publication 547 for details.
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