Tax Relief for Connecticut Victims of Hurricane Ida

On November 3, 2021, the Internal Revenue Service (IRS) published Release CT-2021-05 announcing an extension of filing deadlines for individual and business tax returns of Connecticut victims of Hurricane Ida, as well as for the remittance of any necessary tax payments.

Following the recent Federal Emergency Management Agency (FEMA) disaster declaration, the IRS announced that individuals and households as well as businesses in the following affected areas will qualify to receive tax relief:

• Fairfield County
• New London County
• Mashantucket Pequot Tribal Nation
• Mohegan Tribal Nation

The declaration permits the IRS to postpone certain tax filing and tax-payment deadlines for taxpayers who reside or have a business located in designated disaster areas. As such, deadlines falling on or after September 1, 2021, through January 2, 2022, are postponed until January 3, 2022.

Individuals who had a valid extension to file their 2020 returns will now have until January 3, 2022, to file. Businesses (including tax-exempt organizations) with timely filed extensions will also be granted the additional time. It is important to note, however, that tax payments related to the 2020 returns are not eligible for relief, as these were due in early 2021 and were not affected by the storm.

Notwithstanding the aforementioned, the January 3, 2022, extension does apply to the quarterly estimated tax payment(s) normally due on September 15 and to the quarterly payroll and excise tax returns normally due on January 3, 2022.

Also note that penalties on deposits due on or after September 1, 2021, and before September 16, 2021, will be abated as long as the tax deposits were made by or before September 16, 2021. Since the IRS automatically identifies taxpayers located in a covered disaster area by way of mailing address and applies filing and payment relief, no further action is generally required. However, affected Connecticut taxpayers who reside or have a business located outside of the covered disaster area could and should request this tax relief; such cases will be addressed on a case-by-case basis.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS with an original or extended due date falling within the postponement period, the taxpayer should be able to abate the penalty.

Please contact your dedicated Marcum State and Local Tax Professional to address any questions regarding this notice or any other tax matter.