If you’ve been impacted by the recent storms in Kentucky, tax relief may be available.
Following severe storms in Kentucky this year, which caused flooding, landslides, and mudslides, residents have suffered significant losses, including damage to both personal and business property. The Federal Emergency Management Agency (FEMA) has designated many counties and communities within Kentucky that qualify for public assistance. As a result, the Internal Revenue Service (IRS) is offering flooding tax relief to storm victims. So, how do you know if you qualify for Kentucky flood tax relief? If you are eligible, what are your next steps?
Following, are a few things to keep in mind for Kentucky residents, both to help you know if you qualify for flooding tax relief and to know what it might mean to you.
1. First Things First: Do You Qualify?
To qualify for IRS tax relief, related to the recent storms in Kentucky, you need to live or own a business in a location that FEMA has designated as a disaster area. As conditions change and new information emerges, this list will expand.
For now, if you live or own a business in one of the following counties, you qualify for Kentucky flood tax relief:
Leslie, Pike, Floyd, Breathitt, Clay, Johnson, Knott, Letcher, Whitley, Magoffin, Martin, Owsley, Perry, Wolfe
If you live in the state, but outside the counties listed, be sure to keep an eye out for updates, as you may qualify for IRS tax relief through an expansion of qualifying counties.
Flooding tax relief may also apply if you live outside these areas but have personal or tax records within them. If this is true for you, consider contacting the IRS to confirm your eligibility.
2. What Tax Relief Means for Kentucky Victims
With FEMA’s declaration of disaster areas within Kentucky, the IRS is clear to use tax relief measures to help residents get back on their feet. Under a news release in mid-August this year, the IRS announced that it would allow individuals and businesses to postpone certain tax payment and tax-filing deadlines.
This means, the IRS deadlines on your calendar—either the dates you need to submit your taxes or the dates that payments are due—have shifted for qualifying taxpayers. If you live in a qualifying county in Kentucky, the IRS has offered you tax relief in the way of additional time. This change will be helpful to both individuals and business owners, as you recover physically and financially from storm damage.
3. New Dates to Understand
So, what are the new deadlines for qualified taxpayers? This tax relief offers a variety of postponed tax filing and payment deadlines.
If you had tax deadlines from July 26, 2022, to November 14, 2022, these have now been postponed to November 15, 2022, for qualified taxpayers. For example, a taxpayer with a valid extension for filing their 2021 taxes would have a new date, delayed from the April 30th deadline. If the new date fell between July 26th and November 14th, 2022, you would receive a further extension to November 15th, 2022.
In addition, if you qualify for Kentucky flood tax relief and have quarterly income tax payments due on September 15, 2022, the November 15th extension also applies to you. Similarly, quarterly payroll and excise tax returns, which are normally due on August 1st and October 31st, are also eligible for the tax relief timeline adjustment, with a new date of November 15th, 2022.
Business owners with tax deadlines between July 26th and November 14th, 2022 will also have additional time, depending on the nature of their corporate structure. Note that penalties on payroll and excise tax deposits due July 26th to August 10th, 2022 will be abated, as long as deposits are made by the August 10th deadline.
Keep in mind that this form of tax relief does not extend to tax payments related to your 2021 return, which would have been due April 18th, 2022.
4. Declared Losses
If you live or own a business in a disaster area—as declared by the federal government—you may be wondering about more tax relief than a simple delay in timelines. What if your property has suffered damages not covered by insurance?
When FEMA declares a disaster zone, the IRS will allow you to claim storm-related losses on your federal income tax return. If you live or own a business in a qualified area and have had uninsured losses or unreimbursed disaster-related losses, you can claim these losses on your tax return. The IRS allows you to choose whether to claim them in the year the losses occurred or the year prior.
In the case of flooding tax relief for victims of the 2022 Kentucky storms, you could claim your property losses on either your 2022 or 2021 tax returns. Most taxpayers will examine the tax benefits to see which tax year makes the most sense to declare their losses.
5. If You’re Unsure – Find the Right Team to Help
If you’ve heard about Kentucky flood tax relief but aren’t sure if you qualify, or if the application process will be worth the effort, don’t hesitate to seek professional help. Both personal and business taxpayers stand to benefit from the tax relief efforts announced by the IRS, but if you misunderstand the benefits or miscalculate the timing, you could owe penalties in the end.
Working with tax experts to execute flooding tax relief can reduce your to-do list while giving you the peace of mind that your taxes will be submitted accurately and on time. In addition to helping you with tax relief problems, a professional team of tax experts can help you with other tax questions and issues that you may have pushed to the back burner.
A qualified team can help with everything from payroll tax liens to delinquent taxes or an Offer in Compromise. Be sure to look for a qualified team that will review your situation in depth and helps deliver peace of mind.
At Franskoviak Tax Solutions, we have worked one-on-one with our clients, helping them with tax planning for more than 30 years. We provide comprehensive tax services that prioritize your needs and deliver a personalized, boutique-style approach. Speak to our team about personal and business taxes, payroll taxes, IRS tax relief, and tax problems such as IRS tax notifications, payroll tax debt, delinquent taxes, and more.
Start with a free consultation—we’re here to help simplify your tax concerns, whether you have complex tax problems or want to make the most of IRS tax relief programs.