IRS Extends Tax Deadline for Disaster Victims in Tennessee, Alabama, and Kentucky

Victims of this spring’s storms and tornadoes that took place in Tennessee between March 25 and April 3, 2021 have left many in parts of Tennessee in a state of disaster. If you were impacted by the recent Tennessee storms, tornadoes, and flooding we want you to know TurboTax is here for you, and we want to keep you up to date with important tax relief information that may help you in this time of need.

The Federal Emergency Management Agency (FEMA) declared the recent events as a disaster and the IRS announced that victims of the harsh spring storms that occurred in Tennessee now have until August 2, 2021 to file various individual and business tax returns and make certain tax payments.

What are the extended tax and payment deadlines in Tennessee?

The tax relief postpones various tax filing and payment deadlines that occurred starting on March 25. As a result, affected individuals and businesses in Tennessee will have until August 2, 2021, to file returns and pay any taxes that were originally due during this period. These include:

• 2020 Individual and Business Returns: 2020 individual tax returns and payments that were due on May 17, as well as various 2020 business returns along with payments normally due on April 15 have an extended deadline until August 2, 2021.
• 2020 IRA Contributions: Affected taxpayers will have until August 2 to make 2020 IRA contributions to make an impact on their 2020 taxes.
• 2020 Quarterly Estimated Tax Payments: 2021 quarterly estimated tax payments with a deadline of April 15, 2021 and June 15, 2021 have been extended until August 2, 2021.
• Quarterly Payroll and Excise Tax Returns: Quarterly payroll and excise tax returns that are normally due on April 30, are also extended until August 2, 2021. In addition, penalties on payroll and excise tax deposits due on or after March 25 and before April 9 will be abated as long as the deposits were made by April 9.

Calendar-year tax-exempt organizations, operating on a calendar-year basis that have a 2020 tax return due May 17, also qualify for the extra time.

What do I need to do to claim the tax extension? 

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Taxpayers do not need to contact the IRS to get this 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 current list of eligible localities is always available on the disaster relief page on IRS.gov.

Do surrounding areas outside of Tennessee qualify for an extension? 

The IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers, assisting the relief activities, who are affiliated with a recognized government or philanthropic organization.

How can I claim a casualty and property loss on my taxes if impacted?

Individuals or businesses who suffered uninsured or unreimbursed disaster-related casualty losses can choose to claim them on either the tax return for the year the loss occurred (in this instance, the 2021 return filed in 2022), or the loss can be deducted on the tax return for the prior year (2020). Individuals may also deduct personal property losses that are not covered by insurance or other reimbursements. Be sure to write the FEMA declaration number – 4601DR − on any return claiming a loss. 

The tax relief is part of a coordinated federal response to the damage caused by the harsh winter storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Besides Tennessee, what other states also have more time to file and pay?

• Individuals and businesses in Texas, Oklahoma and Louisiana have until June 15 to file and pay. All taxpayers in these three states qualify for relief.
• Individuals and businesses in parts of Kentucky have until June 30 to file and pay.
• Individuals and businesses in parts of Alabama have until August 2 to file and pay.

If you are not a victim, but you are looking to help those in need, this is a great opportunity to donate or volunteer your time to legitimate 501(c)(3) not-for-profit charities who are providing relief efforts for winter storm victims.

Check back with the TurboTax blog for more updates on disaster relief.