On October 5th, the IRS issued notices regarding tax relief for individuals and businesses in North and South Carolina, similar to one provided recently for Florida. What is somewhat unusual about these disaster relief provisions is that they extend broadly to all of North and South Carolina and Florida, rather than just to areas where the damage from the hurricane was significant. Under the relief provisions, taxpayers will now have until February 15, 2023, to file various individual and business tax returns and make certain tax payments. Here are some of the key points:
- Relief applies to North Carolina for tax filing and payment deadlines falling on or after September 28, 2022, and before February 15, 2023. The effective date for South Carolina is September 25, 2022, and the one for Florida is September 23, 2022.
- Relief applies generally to most tax returns, including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; annual information returns of tax-exempt organizations; and employment and certain excise tax returns.
- Because tax payments related to these 2021 returns were due on April 18, 2022, those payments are not eligible for this relief.
- Relief also applies to the 4th quarter estimated tax payments due January 17, 2023.
- Penalties on payroll and excise tax deposits due on or after the effective dates and before October 13 for North Carolina and October 11 for South Carolina and Florida will be abated as long as the tax deposits are made by those respective dates.
- Unless an act is specifically listed in Rev. Proc. 2018-58, the postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; to Forms 1042-S, 3921, 3922 or 8027; or to employment and excise tax deposits. However, penalties on deposits due on or after the date for which relief is effective, and before October 13 for North Carolina and October 11 for South Carolina and Florida will be abated as long as the tax deposits are made by those respective dates.
- 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.
- Individuals who had a valid extension to file their 2021 return due to run out October 17, 2022, will have until February 15, 2023 to file.
- In a separate notice, the Treasury Department issued a notice announcing that affected taxpayers would have until February 15, 2023 to file the “Report of Foreign Bank and Financial Accounts” (FBAR) for the 2021 reporting year, instead of the usual October 15 deadline.
State Returns: The NC Department of Revenue has issued a notice providing similar tax relief to affected individuals and businesses in all counties of North Carolina. The Florida Department of Revenue also issued a notice stating that it will follow the tax relief granted by the IRS for corporate tax returns and installment payments with original due dates or extended due dates falling on or after September 23, 2022, and before March 2, 2023. These will now have a due date of March 2 applicable to affected businesses anywhere in Florida. The South Carolina Department of Revenue issued a notice on October 10, 2023 generally following the IRS relief provisions, providing an extension until February 15, 2023 for returns due on or after September 23, 2022. SCDOR has also advised that for individual taxpayers filing an SC 1040 after October 15 and on or before February 15, 2023, the individual rebate will be issued by March 31, 2023 rather than the original December 31, 2022 date. It should be kept in mind, however, that many resident businesses may have state filing obligations in states other than the Carolinas and Florida.
For more information regarding relief for taxpayers in the Carolinas and Florida, you can refer to the notices on the Hurricane Ian page at the IRS website:
If you would like more information on Hurricane Ian tax relief, please contact your Elliott Davis tax advisor.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.