IRS offers tax relief to Vermont flood victims

The Internal Revenue Service said Thursday that victims of the heavy flooding in Vermont in recent days will now have until Nov. 15, 2023, to file their individual and business tax returns and make tax payments, pushing back the Oct. 16 deadline.

The White House declared a federal disaster for the state on Tuesday due to the emergency conditions that began Sunday, flooding the state capital in Montpelier and washing out roads in other parts of the state.

The IRS said it’s offering relief to any area designated by the Federal Emergency Management Agency, including postponing various tax-filing and tax-payment deadlines for any taxpayer with an address of record in the disaster area. That means individuals and households that reside or have a business in any of Vermont’s 14 counties can qualify for tax relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Eligible returns and payments include people who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS pointed out, though, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments aren’t eligible for this relief.

Other eligible returns and payments include quarterly estimated income tax payments would usually be due on Sept. 15; quarterly payroll and excise tax returns, normally due on July 31 and Oct. 31; and businesses with an original or extended due date including, among others, calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, and calendar-year corporations whose 2022 extensions run out on Oct. 16.     

In addition, penalties on payroll and excise tax deposits due after July 9 and before July 25, will be abated as long as the deposits are made by July 25.

Other returns, payments and tax-related actions will also qualify for the extra time. Check the IRS disaster relief page for details.

The IRS automatically provides filing and penalty relief to any taxpayer who has an IRS address of record located in the disaster area. Because it’s automatic, taxpayers don’t need to contact the IRS to get the relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

The announcement comes as National Taxpayer Advocate Erin Collins is urging the IRS to do more to avoid sending confusing CP14 balance due notices to taxpayers in areas affected by natural disasters (see story). The IRS had to send out follow-up letters last month to taxpayers in disaster areas reminding them they had more time to pay their taxes (see story).

The IRS said it will work with any taxpayer who lives outside the disaster area but who has records they need to meet a deadline within the affected area during the postponement period. Taxpayers who qualify for relief who live outside the disaster area should contact the IRS at (866) 562-5227. That also includes workers who are helping with relief and are affiliated with a recognized government or philanthropic organization.