In response to California’s disastrous winter storms, the IRS announced an extension to the state and federal tax deadline for impacted California taxpayers on March 10, 2023. The California tax extension moves the tax deadline from April 18 to October 16, 2023, to file individual and business state and federal tax returns along with specific tax payments.
The California tax extension includes:
- Individuals whose tax return and payments are due on April 18, 2023
- Quarterly estimated tax payments due January 17, 2023, March 15, 2023, April 18, 2023, June 15, 2023, and September 15, 2023
- Business entities who tax returns are normally due on March 15 and April 18, 2023
- Pass-through entity (PTE) elective tax payments due on March 15, 2023 and June 15, 2023
The extension applies to:
- Individual return filing
- Corporate return filing
- Trust and estate return filing
- Excise tax
- Income tax
- Payroll tax
- Farmers within impacted counties who typically file their returns by Mar 1, 2023
Qualifying taxpayers and businesses even have until October 16 to make 2022 contributions to their IRAs and health savings accounts.
Impacted Taxpayers
According to the news release, the extension is only available to individual taxpayers and businesses located in the covered disaster areas, which include the following counties:
- Alameda
- Alpine County
- Amador
- Butte
- Colusa
- Contra Costa
- Del Norte
- El Dorado
- Fresno
- Glenn
- Humboldt
- Inyo
- Kings
- Lake
- Los Angeles
- Madera
- Marin
- Mariposa
- Mendocino
- Merced
- Mono
- Monterey
- Napa
- Nevada
- Orange
- Placer
- Riverside
- Sacramento
- San Benito
- San Bernardino
- San Diego
- San Francisco
- San Joaquin
- San Luis Obispo
- San Mateo
- Santa Barbara
- Santa Clara
- Santa Cruz
- Siskiyou
- Solano
- Sonoma
- Stanislaus
- Sutter
- Tehama
- Trinity
- Tulare
- Tuolumne
- Ventura
- Yolo
- Yuba
The IRS also provided a plan for individuals and organizations aiding in relief activities. These individuals or organizations should contact the IRS at 866-562-5227 for more information.
Counties Not Applicable for the California Tax Extension
The IRS specifically notes this extension does not apply to residents and businesses in Imperial, Kern, Lassen, Modoc, Plumas, Shasta, and Sierra county. These residents and businesses must comply with the normal tax deadlines established by the IRS.
However, the IRS issued in their memo that they will work with any taxpayer who lives outside the disaster area, but whose records necessary to meet a deadline occuring during the postponement period are located in an affected county.
Important Tax Forms
Even though the California tax deadline has been pushed out for 6 months, it’s helpful to get a jump start on gathering necessary documents and forms to ensure you meet the new October 16 deadline.
One area most people may be unfamiliar with is the required tax forms for decedent estates. There are typically 7 forms that estate executors or administrators need to complete, which include:
- Form 1040: Final income tax return of the decedent
- Form 1041: Income tax return of a decedent’s estate after they pass
- Form 56: Authorization to act as fiduciary on behalf of the decedent or estate
- Form 706: Estate tax return used for estates that are greater than estate tax exemption
- Form 8822: Form to notify the irs of a chance in the decedent’s mailing address
- Form 8821: Form to request information from the IRS on behalf of the decedent
- Form 540 (California only): Income tax return for Californians
Tax Relief for Californians
Affected taxpayers and businesses do not need to contact the IRS or submit paperwork to apply for the tax extension. However, if any late notices are issued to you it is recommended that you contact the phone number on the notice for next steps.
In addition to the California tax extension, Governor Gavin Newsom announced in January that impacted taxpayers are also eligible to claim a deduction for a disaster loss when filing either an original or amended tax year 2022 tax return. The State of California Franchise Tax Board offers guidance on how to claim a state tax deduction here.
If you have been impacted by the 2022 winter storms and qualify for the California tax extension and have additional questions on tax relief options, the state has created a helpful FAQ page as a resource.
Prudent Investors is local to California and our team works closely with tax accountants across the state to ensure your tax filings are both accurate and timely. If you are looking for a financial advisor experienced in asset management for trusts and estates, we invite you to connect with us for a complimentary portfolio evaluation.
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