This year has been marked with challenge after challenge for Los Angeles and California business owners. In many cases, the arrival of COVID-19 brought about changes in business operations, including how services and products are sold, delivered, and even impacted employee safety rules and operating hours. Just as businesses were finally recovering, the Bobcat fire in Los Angeles County and the El Dorado fire in San Bernardino County started. Although wildfires are not new to the California landscape, this year has been especially damaging, with over 4 million acres burned, leaving homes and businesses damaged or destroyed. This has left many with more questions than answers about the future. One silver lining is that on October 19, 2020, the IRS announced that victims of the wildfires started on September 4 will now have until January 15, 2021, to file individual and business tax returns, as well as make tax payments. To help clients, prospects, and others, JLK Rosenberger has provided a summary of the details below.
Tax Relief Details
- Individuals that had filed for an extension of the 2019 tax return. Note that since tax payments for individual returns were due July 15, 2020, the payment deadline is not extended.
- Businesses with an extended filing deadline typically due on October 15, 2020.
- Quarterly estimated income tax payments normally due on September 15, 2020.
- Quarterly excise tax payments normally due on November 2, 2020.
- Tax-Exempt organizations operating a calendar year-end basis that received a valid extension normally due on November 16, 2020.
Applying for Relief
For businesses and individuals interested in applying for relief, the good news is there is no need to do so. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located within the disaster area. This means there is no need to contact the IRS to receive the extension. Finally, in the recent announcement, the IRS indicated they will work with any taxpayers who reside outside the disaster area, but where records essential for tax filings or payments are located within the area.
State Tax Relief
Before the IRS announcement, on October 7, the California Franchise Tax Board (FTB) announced special relief for wildfire victims. It provides an extension to file 2019 California income tax returns and related payments to December 15, 2019. The relief provides immediate assistance to:
- Business taxpayers with a filing or payment due date between now and December 15, 2020.
- Individual taxpayers with an extended filing deadline of October 15, 2020. It is important to note that since individual income tax payments were due on July 15, 2020, related payments are not eligible under this relief.
The wildfires have created additional challenges at a time when many are stretched thin. The federal and state tax filing and payment relief provides needed time to deal with more pressing matters. However, it is important to consult with a qualified tax advisor to ensure qualification and resulting tax opportunities. If you have questions about the information outlined above or need assistance with another tax or accounting issue, JLK Rosenberger can help. For additional information, call us at 818-334-8623 or click here to contact us. We look forward to speaking with you soon.