The California Franchise Tax Board (FTB) on Wednesday, Oct. 5, announced special state tax relief for taxpayers and businesses affected by Hurricane Ian.
Taxpayers and businesses in presidentially declared disaster areas are granted an extension to Feb. 15, 2023, to file California tax returns on 2021 income and make any tax payments that would have been due between Sept. 23, 2022, and Feb. 15, 2023.
“This offers relief to taxpayers who were victims of Hurricane Ian and have a California filing requirement,” said State Controller and FTB Chair Betty T. Yee. “For some, this will mean several additional months to file their California tax returns or make their quarterly estimated tax payment to the state.”
The relief means those affected taxpayers who would have had an Oct. 17, 2022, tax filing deadline now have until Feb. 15, 2023, to file. However, tax year 2021 tax payments originally due on April 18, 2022, are not eligible for the extension.
The IRS recently announced that taxpayers affected by Hurricane Ian in Florida qualify for the extension to Feb. 15, 2023, to file certain individual and business tax returns and make certain tax payments. FTB automatically conforms to Internal Revenue Service (IRS) postponement periods for presidentially declared disasters.
Taxpayers who are affected by a presidentially declared disaster may claim a deduction for a disaster loss. Additional information and instructions are available in FTB Publication 1034, 2021 Disaster Loss: How to Claim a State Tax Deduction.
Taxpayers can claim a disaster loss in one of two ways. They may claim the disaster loss for the 2022 tax year when they file their return next spring, or they may claim the loss against 2021 income on this year’s return. An amended return may be filed by those who already have filed this year. The advantage of claiming the disaster loss on a tax year 2021 return is that FTB can issue a refund sooner.
Taxpayers should write the name of the disaster (for example, Hurricane Ian) in blue or black ink at the top of their tax return to alert FTB. If taxpayers are filing electronically, they should follow the software instructions to enter disaster information. If an affected taxpayer receives a late filing or late payment penalty notice related to the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
Disaster victims also may receive free copies of their state returns to replace those lost or damaged. Taxpayers may complete form FTB 3516 and write the name of the disaster in blue or black ink at the top of the request.
[Information via news release from the California Franchise Tax Board.]