Notice 2022-13 was recently released and provided all qualifying farmers with relief from the March 1 deadline, so long as they file and pay their taxes by April 18 (or April 19 for Maine and Massachusetts farmers). Qualifying farmers and fisherman are those who have at least two-thirds of their gross income from farming or fishing either this year or last year.
As a refresher, qualifying farmers and fishermen usually take one of two approaches:
- Pay a January 15 estimated tax payment and file and pay their taxes by April 18, or,
- Make no estimated tax payments and file and pay their taxes by March 1.
If a qualifying farmer or fisherman doesn’t take either of the two options above, they generally are subject to an underpayment penalty for their estimated taxes. The last few years have challenged many farmers with being able to file by March 1 because of different tax rule changes and tax software not being able to keep up. This year has been no different, which is why the IRS provided penalty relief.
For qualifying farmers and fisherman who filed their tax returns after March 1, Notice 2022-13 also provides penalty relief. However, from a practical standpoint if the penalty was a small amount, it may not be worth the trouble of going through the IRS to claim it, as it may cost more time and effort than the actual amount of the penalty.
Contact Us to be connected with a Farm Credit East Tax Specialist.