As many of you may have read in the media, the IRS and California Franchise Tax Board (FTB) have postponed most of this year’s tax filing and payment deadlines to October 16, 2023. In January 2023, 31 counties in California were designated as part of a federally declared disaster area as a result of the extreme rainfall and flooding that affected the state early in the year. The disaster area includes the following counties: Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo, and Yuba.
Affected taxpayers include anyone who lives in these counties and any businesses located in these counties, regardless of whether or not taxpayers suffered damages as a result of the storms. The IRS will automatically provide filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief, nor do they need to file for an extension.
Originally, the 2022 tax deadline was postponed to May 15, 2023, but on February 24, 2023, the IRS further extended the deadline to October 16, 2023. The FTB has also conformed to the IRS extension. The new October 16, 2023 deadline applies to all the following tax filings and payments:
- 2022 personal income tax returns and the payment of any resulting tax due
- 2022 business tax returns and tax-exempt entity returns originally due January 15 through May 15 of 2023 and the payment of any resulting tax due
- Fourth quarter 2022 estimated tax payments that were originally due January 15, 2023
- 2023 estimated tax payments originally due April 18, June 15, and September 15 of 2023
- California Pass-Through Entity Tax payments originally due June 15, 2023
- Quarterly payroll and excise tax returns originally due January 31, April 30, and July 31 of 2023
The COVID-19 pandemic caused a postponement of several tax filing and payment deadlines over the past few years. Our experience with these deadline postponements was that the IRS and FTB often did not properly update their computer systems to account for the postponements, which resulted in many erroneous assessments of late penalties and interest for payments made after the original filing deadlines. In an attempt to avert as many erroneous notices as possible we recommend that if your taxes are prepared before the original tax filing and payment deadlines, you make your payments based on the original payment schedule. Accordingly, our filing instructions that are included with your tax return will state the original payment deadlines. We understand that many of our clients may have large tax payments due, and the deferral of payments to October 16, 2023 will offer significant advantages given today’s high-interest rates. There will be no penalties or interest charged by the FTB or IRS if you decide to defer payment until the extended deadline.
If you have any questions or concerns regarding these postponed deadlines, please do not hesitate to contact your tax preparer.