TX-2021-02, February 22, 2021 (IRS Notice)
Texans endured over a week of snow, ice, and sub-freezing temperatures that literally shut down a majority of the state. Utility and water outages compounded the problem. Today, the Treasury announced additional time to file tax returns and make certain tax payments for Texans. We have copied the IRS Notice below and provided notes as needed (bold, is emphasis added by this firm)
Extension of Deadline
Victims of winter storms that began February 11, 2021 now have until June 15, 2021, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.
Following the recent disaster declaration issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers will receive tax relief.
Individuals and households affected by severe winter storms that reside or have a business in all 254 Texas counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after February 11, 2021, and before June 15, 2021 are postponed through June 15, 2021. This includes various 2020 business tax returns due on March 15 and 2020 individual and business returns due on April 15. Taxpayers also have until June 15 to make 2020 IRA contributions.
(The above deadline change would include the Form 1040 for individuals, Form 1065 for Partnerships, Form 1120-S for S-Corporations, Form 1120 for C Corporations, and Form 1041 for estates and trusts).
The June 15, 2021 deadline applies to the fourth quarter estimated tax payment due on April 15.
(The above appears to be a misprint as the fourth quarter estimated tax payment was due January 15, 2021. This is most likely referencing the first quarter 2021 payment that would have been due April 15, 2021 and now is due June 15, 2021)
It also applies to the quarterly payroll (Form 941) and excise tax returns normally due on April 30, 2021. In addition, it applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17, 2021. In addition, penalties on deposits due on or after February 11, 2021 and before February 26, 2021, will be abated as long as the tax deposits were made by February 26, 2021.
(If you were unable to timely make a payroll tax deposit due between February 11, 2021 and before February 26, 2021, then penalties will be abated if you make the deposit by February 26, 2021)
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 that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. But affected taxpayers 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.
The extension of time to file does not necessarily apply to state returns. So, we will need to wait and see if the Texas Franchise tax return normally due May 15 will be extended. Texas did recently provide limited relief for sales tax returns originally due February 20, 2021.
For those who make estimated tax payments, this will once again result in two estimated tax payments due on the same date (first and second quarter) of June 15, 2021.
This notice appears to apply farmer's tax returns due March 1, 2021 as the notice states "certain deadlines falling on or after February 11, 2021."
There are also provisions relating to various situations in which someone may not be a Texas resident, but has a significant connection to Texas might qualify for relief. For example, if records required to comply with tax responsibilities were located in Texas, then you might qualify for relief. Use the number noted above to contact the IRS if you have specific questions related to your eligibility for relief.
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