Severe storm victims in Kentucky and Alabama earlier this year will have more time to file their 2020 income tax returns. For the victims of the Kentucky storm, the due date is now June 30, 2021; It is August 2, 2021 for victims in Alabama. This IRS announcement follows a Federal Emergency Management Agency (FEMA) disaster area declaration for these two states. Taxpayers in other states affected by the storms who receive similar FEMA disaster declarations will automatically receive the same filing and payment facility.
It affects people in Kentucky who were affected by the severe storms, floods, landslides and mudslides on February 27 and in Boyd, Breathitt, Carter, Casey, Clay, Cumberland, Elliott, Estill, Floyd, Franklin, Jackson, Johnson and Knott live or have a business Knox, Lawrence, Lee, Lincoln, Magoffin, Marion, Martin, Mason, Morgan, Ohio, Pike, Powell, Rockcastle, and Wolfe Counties are eligible for tax breaks.
In Alabama, the tax break is available to those affected by the major storms, straight winds, and tornadoes on March 25th who live or have a business in Bibb, Calhoun, Clay, Hale, Jefferson, Perry, Randolph, and Shelby Counties.
Various Kentucky individual and corporate tax filing and payment deadlines between February 27 and June 29 will be postponed to June 30. Likewise, for individuals and businesses in Alabama, the federal tax deadlines between March 25 and August 1 will be postponed to August 2 In addition to the May 17 income tax filing deadline, this includes:
- 2020 IRA contributions originally due May 17;
- Quarterly estimated income tax payments, typically due April 15 and June 15;
- Quarterly payroll and excise returns, normally due April 30th; and
- 2020 tax returns for exempt organizations, which are normally due May 17th.
Kentucky also eliminates penalties for wage and excise tax deposits due February 27 through March 14 if the deposits are made by March 15. In Alabama, this also applies to deposits due March 25th through April 9th.
You don’t have to go to the IRS to get this relief. However, if you receive a late filing or late payment notification from the IRS whose original or extended filing, payment or deposit date is within the deferred period, you should call the number on the notice to reduce the penalty.
In addition, the IRS works with any taxpayer who lives elsewhere but whose records are required to meet a deadline occurring during the deferment period, in Kentucky or Alabama. Taxpayers who qualify for relief and live in another state must contact the IRS at 866-562-5227. This also includes staff assisting the relief effort who belong to a recognized government or philanthropic organization, as well as those visiting the disaster area covered and killed or injured as a result of the storm.
Persons and companies in a disaster area declared by the federal government who have suffered uninsured or non-reimbursed catastrophe-related losses can either claim them for the return of the year in which the damage occurred (in this case the return normally submitted in the next year in 2021) or for the return claim for the previous year. This means that taxpayers can claim these losses at their own discretion on the 2020 tax return they fill out this tax season. Be sure to write the FEMA declaration number (4595-DR for Kentucky, 4595-DR for Alabama) on any return that is made for loss. It is also a good idea for concerned taxpayers claiming the disaster loss on a return in 2020 to use the disaster designation (for example, “Kentucky – Severe Storms, Floods, Landslides, and Mudslides” or “Alabama – Severe Storms, Straight line winds and “) tornadoes” in bold letters at the top of the form. See IRS Publication 547 for more information.