The IRS has granted victims of the recent Montana severe storms and flooding more time to file various individual and business tax returns and make tax payments. Specifically, victims of the storms and flooding that began on June 10, 2022, have until October 17, 2022, to file and pay tax returns and payments due between June 10 and October 16.
The tax relief is available to anyone in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. At this point, only affected taxpayers who live or have a business in Carbon, Park and Stillwater Counties qualify for the extensions, but the IRS will offer the same relief to any taxpayers in other Montana localities designated by FEMA later.
The IRS will also work with other people who live outside the disaster area but whose tax records are in the disaster area. Call the IRS at 866-562-5227 if you face this situation. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization, and anyone visiting the area who was killed or injured as a result of the disaster.
The deadlines that are pushed back for Montana storm and flooding victims include the quarterly estimated tax payments that are due on June 15 and September 15, 2022. The due date for quarterly payroll and excise tax returns normally due on August 1, 2022, are extended to October 17, too. Penalties on payroll and excise tax deposits due from June 10 to June 26 are also waived as long as the deposits were made by June 27, 2022.
The due date for 2021 business tax returns that were properly extended to September 15, 2022, are now due by October 17 for the storm and flooding victims.
Taxpayers don’t need to contact the IRS to get this relief. However, if an affected person receives a late filing or payment penalty notice from the IRS, he or she should call the number on the notice to have the penalty abated.
Deduction for Damaged or Lost Property
Victims of the Montana severe storms and flooding may be able to claim a tax deduction for unreimbursed damaged or lost property. To do so, they typically must itemize and file Schedule A with their tax return. However, victims who claim the standard deduction may still be able to deduct their losses if they can claim them as business losses on Schedule C.
The deduction can be claimed on the tax return for the year the damage or loss of property occurred or for the previous year. So, for any destruction in 2022, the deduction can be claimed on either a 2021 tax year return or a 2022 return. In either case, you must write the FEMA declaration number on the return claiming the deduction. For the recent Montana severe storms and flooding, the number is DR-4655-MT.
If you decide to claim a deduction for 2021, you can amend your 2021 return by filing Form 1040X. For this purpose, you must file the amended return no later than six months after the due date for filing your return (without extensions) for the year in which the loss took place. So, for Montana storm or flooding losses in 2022, you would need to file an amended 2021 return by October 16, 2023. Affected taxpayers claiming the disaster loss on a 2021 return should also put the Disaster Designation (“Montana Severe Storms and Flooding”) in bold letters at the top of the form. See IRS Publication 547 for details.