The IRS has announced an additional extension of time for certain tax relief for all or part of six qualifying states related to Hurricane Ida.[1] Before this news release, affected taxpayers had until January 3, 2022 to file various tax returns and make various tax payments. The news release has moved that date to February 15, 2022.

While the IRS did not provide a reason for granting this extension, it seems likely that complaints that January 3, 2022 was during the IRS’s annual shutdown of both the individual and business electronic filing systems had a role in this relief. Those filing on the original January 3, 2022 extended relief date would have been required to file the returns in paper form rather than electronically.

The IRS has been experiencing significant delays in processing paper filed returns since the beginning of the COVID-19 pandemic, and on December 20, 2021 reported that the agency still had 6.2 million unprocessed individual returns.[2] The IRS notes that returns filed on paper received prior to April 2021 have been processed if they did not have errors or required additional review—but note that is well before the final unextended due date for filing such returns.

Advisers were concerned about the impact of filing returns during the IRS shutdown of the electronic filing systems, especially when such returns could contain overpayments the taxpayer wished to have applied to 2021 returns. February 15, 2022 will be after both the individual and business electronic filing systems are restarted for the new year.

The news relief indicates the following areas are covered by the relief:

The updated relief covers the entire states of Louisiana and Mississippi, as well as parts of New York, New Jersey, Connecticut and Pennsylvania. The current list of eligible localities is always available on the Around the Nation section of the disaster relief page on IRS.gov.

The updated relief postpones various tax filing and payment deadlines that occurred starting on dates that vary by state:

August 26, 2021 for Louisiana,
August 28, 2021 for Mississippi,
August 31, 2021 for Pennsylvania and
September 1, 2021 for New York, New Jersey and Connecticut.[3]

The release goes on to describe the relief granted for filing of income tax returns:

As a result, affected individuals and businesses will have until February 15, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return that ran out on October 15, 2021, will now have until February 15, 2022, to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

…

The February 15 deadline also applies to the quarterly payroll and excise tax returns normally due on November 1, 2021, and January 31, 2022. Businesses with an original or extended due date also have the additional time including, among others, calendar-year partnerships and S corporations whose 2020 extensions ran out on September 15, 2021, and calendar-year corporations whose 2020 extensions ran out on October 15, 2021. It also applies to calendar-year tax-exempt organizations whose 2020 extensions ran out on November 15, 2021.[4]

The news release provides guidance on affected estimated tax payments that would have been due during the period from the beginning of the relief through February 15 that indicates individual taxpayers whose 3rd and 4th quarter estimated tax payments for 2021 were due during that period will now be able to make those payments with their individual income tax returns:

The February 15 extended deadline also applies to quarterly estimated income tax payments that were due on September 15, 2021, and January 18, 2022. This means that taxpayers in these areas can now skip making their estimated tax payments for both the third and fourth quarters of 2021 and instead include them when they file their 2021 return.[5]

Note added December 31: The notation above about not having to pay the 3rd and 4th quarter estimates, rather paying them with the tax return for 2021, was removed by the IRS in a revision to the site published on December 30, 2021. That paragraph now reads:

The February 15 extended deadline also applies to quarterly estimated income tax payments that were due on September 15, 2021, and January 18, 2022.

The notice provides information on returns that the IRS will automatically identify as qualifying for this relief, as well as how to claim this relief in cases where the return is not automatically identified as qualifying by the agency:

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency 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.

In addition, 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.[6]

[1] “Hurricane Ida tax relief extended to February 15 for part or all of six qualifying states,” IRS News Release IR-2021-254, December 22, 2021, https://www.irs.gov/newsroom/hurricane-ida-tax-relief-extended-to-february-15-for-part-or-all-of-six-qualifying-states (retrieved December 24, 2021)

[2] “IRS Operations During COVID-19: Mission-critical functions continue,” IRS website, December 20, 2021 update, https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue (retrieved December 24, 2021)

[3] “Hurricane Ida tax relief extended to February 15 for part or all of six qualifying states,” IRS News Release IR-2021-254, December 22, 2021

[4] “Hurricane Ida tax relief extended to February 15 for part or all of six qualifying states,” IRS News Release IR-2021-254, December 22, 2021

[5] “Hurricane Ida tax relief extended to February 15 for part or all of six qualifying states,” IRS News Release IR-2021-254, December 22, 2021

[6] “Hurricane Ida tax relief extended to February 15 for part or all of six qualifying states,” IRS News Release IR-2021-254, December 22, 2021