IRS Provides Tax Relief for Tornado Victims in Parts of Illinois, Tennessee, and Kentucky

Victims of this month’s tornadoes that took place in parts of Illinois, Tennessee, and Kentucky starting December 10 have left many in a state of disaster. If you were impacted by the recent storms, tornadoes, and flooding we want you to know TurboTax is here for you, and we want to keep you up to date with important tax relief information that may help you in this time of need.

The Federal Emergency Management Agency (FEMA) declared the recent events as a disaster, and the IRS announced that victims of the harsh storms that occurred in parts of Illinois, Tennessee, and Kentucky now have until May 16, 2022 to file various individual and business tax returns and make certain tax payments.

What are the extended tax and payment deadlines in Kentucky, Illinois, and Tennessee?

The tax relief postpones various tax filing and payment deadlines that occurred starting on December 10. As a result, affected individuals and businesses in Kentucky will have until May 16, 2022, to file returns and pay any taxes that were originally due during this period. These include:

• 2021 Individual and Business Returns: 2021 individual tax returns and payments that are due on April 18, as well as various 2021 business returns along with payments normally due on March 15 and April 18 have an extended deadline until May 16, 2022.
• 2021 IRA Contributions: Affected taxpayers will have until May 16 to make 2021 IRA contributions to make an impact on their 2021 taxes.
• Quarterly Estimated Tax Payments: 2021 and 2022 quarterly estimated tax payments with a deadline of January 18, 2022 and April 18, 2022 have been extended until May 16, 2022.
• Quarterly Payroll and Excise Tax Returns: In addition, the quarterly payroll and excise tax returns normally due on Jan. 31 and May 2, 2022 are also now due on May 16. Penalties on payroll and excise tax deposits due on or after December 10 and before December 27 will be abated as long as the deposits are made by December 27, 2021. 

In addition, Farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due.

What do I need to do to claim the tax extension? 

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Taxpayers do not need to contact the IRS to get this relief. 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.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Do surrounding areas outside of Kentucky qualify for an extension? 

The IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to 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.

How can I claim a casualty and property loss on my taxes if impacted?

Individuals or businesses who suffered uninsured or unreimbursed disaster-related casualty losses can choose to claim them on either the tax return for the year the loss occurred (in this instance, the 2021 return filed in 2022), or the loss can be deducted on the tax return for the prior year (2020). Individuals may also deduct personal property losses that are not covered by insurance or other reimbursements.

Be sure to write the FEMA declaration number – 4630DR − on any return claiming a loss. 

The tax relief is part of a coordinated federal response to the damage caused by the harsh winter storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

If you are not a victim, but you are looking to help those in need, this is a great opportunity to donate or volunteer your time to legitimate 501(c)(3) not-for-profit charities who are providing relief efforts for winter storm victims.

Check back with the TurboTax blog for more updates on disaster relief.