This newsletter is directed to those affected by federally declared disaster areas including San Diego County (businesses & residents).
Hi Everyone
Due to severe storms, the IRS announced today that individual and business taxpayers located in San Diego County are granted automatic filing relief until June 17, 2024. The June 17 filing postponement matches similar relief provided to taxpayers in other parts of the country suffering from severe storms. Please see the end of this email for a list of other states impacted.
Today’s announcement only covers San Diego County. Currently, no other counties in California are eligible for the filing postponement, but this may change.
This postponement means that the new June 17, 2024, deadline applies to:
- Individual income tax returns and payments normally due on April 15, 2024;
- 2023 contributions to IRAs and health savings accounts for eligible taxpayers;
- 2024 estimated tax payments normally due on April 15, 2024;
- Quarterly payroll and excise tax returns normally due on January 31 and April 30, 2024;
- Calendar-year partnership and S corporation returns normally due on March 15, 2024;
- Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024; and
- Calendar-year tax-exempt organization returns normally due on May 15, 2024.
We are requesting all documents and payment be submitted by May 15th, 2024 in order to file by June 17, 2024 for those affected by the announcement.
If you would prefer to file an extension and haven’t already let our office know, please reach out at your earliest convenience. If you have already notified our office requesting an extension, you are on our extension list and your return will be completed after the June 17, 2024 deadline.
Connecticut, Rhode Island, and West Virginia Taxpayers
In January, the IRS announced relief for certain individuals and businesses in parts of Connecticut and Rhode Island affected by severe storms and flooding. These taxpayers now have until June 17, 2024, to file various individual and business tax returns and make tax payments. If you have a state filing requirement in Connecticut or Rhode Island, please reach out to us directly to learn more information.
Please let us know if you have any questions about how this applies to you and your tax returns.
Disaster Related Distribution from Retirement Account
The Secure 2.0 Ac adds a new retirement plan distribution that is excluded from the 10% early withdrawal penalty for “qualified disaster recovery distributions.”
A qualified disaster recovery distribution is any distribution made:
- On or after the first day of an incident period of a qualified disaster and before the date that is 180 days after the applicable date with respect to such disaster; and
- To an individual whose principal place of abode at any time during the incident period of the qualified disaster is located in the qualified disaster area and who has sustained an economic loss by reason of the qualified disaster.
The maximum aggregate distribute a taxpayer can take as a qualified disaster recovery distribution is $22k.
Repayments
Any amounts withdrawn can be recontributed to the same or another eligible retirement account within three years and treated as if the recontributed amounts were rollover contributions.
Income inclusion spread over three years
Qualified disaster recovery distributions are included in income ratably over three years beginning with the year of distribution. Taxpayers can elect to not apply this provision and include the entire distribution in income at the time of the distribution.
Other disaster-related relief
The SECURE 2.0 Act also provides the following Presidentially declared disaster-related relief:
- Increases the nontaxable loan amount a taxpayer residing in a disaster area can withdraw from their qualified employer retirement account from $50,000 to $100,000 and up to the full value of the nonforfeitable accrued benefits in the account, and delays the due date for repayments by one year, and
- Allows first-time homebuyer distributions made to an individual to purchase or construct a home in the disaster area to be recontributed into their retirement account and treated as a rollover contribution if the initial distribution was received between 180 days before the first day of the incident period and 30 days after the last day of the incident.