The recent Northeast flood events have been devastating for Farm Credit East customers and others in the affected areas, particularly those in Vermont. In the wake of these events, the IRS has released tax relief information for individuals, households and businesses. Following is federal tax relief guidance applicable to anyone located in a FEMA-declared disaster county along with state tax relief specific to those located in Vermont’s 14 hard-hit counties.
Federal Tax Relief
The Internal Revenue Service, in IR-2023-125, postponed various tax filing and payment deadlines. The chart below summarizes the filings that have been extended until November 15, 2023, along with other available relief.
|Federal Deadlines Extended to November 15, 2023|
|Individuals||Payroll and Excise||Businesses|
|Income tax returns with a valid extension due to run out on October 16, 2023||Quarterly returns normally due July 31 and Oct 31||Calendar year partnerships and S Corporations whose extension runs out on Sept 15|
|Quarterly estimated tax payments normally due September 15||Penalties on tax deposits due between July 7-July 25 will be abated if deposit made by July 25||Calendar-year corporations whose extensions run out on Oct 16|
*Other returns, payments and tax-related actions also qualify for the additional time. Details are available at the IRS disaster relief page.
While individuals have relief in terms of additional time to file their returns, the IRS noted that because tax payments related to these 2022 returns were due on April 18, 2023, there is no relief available for those payments as the disaster had a start date of July 7, 2023.
In addition to this relief, which is automatic to taxpayers with an IRS address of record located in the disaster area, the IRS will work with any taxpayer who lives outside the disaster area but whose records are located in the affected area and are necessary to meet a deadline occurring during the postponement period.
Vermont State Tax Relief for Vermont
Following the IRS relief, Vermont Governor Phil Scott directed the Commissioner of Taxes to extend Vermont state tax deadlines for those impacted by the flood events. Taxpayers impacted by the flood do not need to contact the Department of Taxes to request extensions to November 15 for the following tax types with original due dates between July 7 and November 15, 2023:
- Corporate and business income tax, including estimated payments
- Sales and use tax
- Meals and rooms tax
- Payroll withholding tax
- Estimated personal income tax payments, originally due September 15, 2023
- Filing of 2022 Vermont personal income taxes with a valid federal or Vermont extension
Vermont tax obligations beyond those listed above may be eligible for extension, but taxpayers will need to contact the Taxpayer Services Division and may be asked to provide proof of hardship.
Unlike the federal relief, which is granted by address of record, the governor’s office noted in a press release that Vermonters not impacted by the flood are expected to file and pay their state tax obligations by the original due dates.
Claiming Disaster Losses
The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for all 14 of Vermont’s counties. Additional declarations may be made in other Northeast states. As a result, individuals and businesses who suffer uninsured or unreimbursed disaster related losses may be able to claim these losses on their income tax returns. Claiming a disaster area loss requires navigating many rules around when to deduct the loss, calculating the loss, and where to report the loss on your tax return. Be sure to write the FEMA declaration number – 3595-EM – on any return claiming such a loss.
Your Farm Credit East team is aware of the relief available and stands ready to assist you through this challenging time and assist you in applying this relief to your circumstances. If you have experienced significant flood damages or other casualty/disaster losses anywhere in the Northeast, contact your local Farm Credit East office to discuss your tax options.