Earlier this week the IRS changed some of their tax deadlines for Californians impacted by the current storms. The California Franchise Tax Board (FTB) had not made a statement with guidance on their position. Yesterday the FTB extended the tax filing and payment deadlines to conform with the recent IRS change.
Due to a state of emergency declared by the federal and state governments as a result of recent storms, flooding and mudslides, individuals and businesses in affected counties will have until May 15, 2023 to file 2022 tax returns and make various tax payments. The IRS and FTB have advised that disaster loss tax deductions will be available on original or amended 2022 tax returns.
The FTB has also stated that they will be suspending the mailing of collection notices to taxpayers impacted by the storms for thirty days, beginning January 13, 2023. If the FTB sends a taxpayer a late filing or payment penalty notice related to the new extended deadline in error, taxpayers should look into penalty abatement.
One additional topic is the possibility of destruction of records due to the storms. Reach out to a tax professional for strategies to deal with this in order to have your tax return filed on time. Reconstruction of records is a time consuming process but necessary when original documents have been lost, damage or destroyed. Consider filing an extension if more time is needed to prepare your documents. Be aware that extension of time to file does not mean an extension of time to pay any taxes due. Taxes owed by the new May 15, 2023 filing deadline must be paid in order to avoid a failure to pay penalty, even if a tax return is put on extension for six months. If a tax return results in a refund, there will be no penalties.