IRS Extends Tax Deadline to June 15 for Victims of Texas Winter Storms

The Internal Revenue Service announced victims of this month’s winter storms in Texas will have until June 15, 2021 to file various individual and business tax returns and make tax payments. The tax relief is part of a coordinated federal response to the damage caused by these storms. The IRS is providing this relief to the entire state of Texas.

The tax relief postpones various tax filing and payment deadlines that occurred starting on February 11. As a result, affected individuals and businesses will have until June 15, 2021 to file returns and pay any taxes that were originally due during this period. This includes 2020 individual and business returns normally due on April 15, as well as various 2020 business returns due on March 15.

The June 15 deadline also applies to quarterly estimated income tax payments due on April 15 and the quarterly payroll and excise tax returns normally due on April 30. It also applies to tax-exempt organizations, operating on a calendar-year basis, that have a 2020 return due on May 17.

In addition, penalties on payroll and excise tax deposits due on or after February 11 and before February 26 will be abated as long as the deposits are made by February 26.

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. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on the 2020 return they are filling out this tax season.

Credit for Other Dependents

Taxpayers with dependents who don't qualify for the $2,000 child tax credit may be able to claim the $500 dependent credit (also known as the Credit for Other Dependents).

The Credit for Other Dependents can be used for the following types of dependents:

● Dependent children who are between the ages of 17 and 23 and are still in school. ● Dependent qualifying relatives (ie: parents, grandparents, uncles, aunts, or other relatives) who are supported by the taxpayer. ● Non-relative dependents who live with the taxpayer.

There are a few additional requirements to claim the Credit for Other Dependents:

● The taxpayer must claim the dependent on the tax return. ● The taxpayer must provide at least half of the dependent’s support for the year. ● The dependent must have earned less than $4,300 in 2020. ● The dependent must be a U.S. citizen, national or resident alien.

The credit begins to phase out when the taxpayer's income is more than $200,000. This phaseout begins for married couples filing a joint tax return at $400,000.

Recovery Rebate Credit for Missing Stimulus Payments

Taxpayers may be able to claim the recovery rebate credit if they were eligible for Economic Impact Payments and didn’t receive one or both rounds of Economic Impact Payments or received less than they were entitled.

In order to claim the recovery rebate credit, taxpayers must file a tax return, even if they aren’t normally required to file. In addition, taxpayers will need to know the amount of any Economic Impact Payments issued in order to claim the Recovery Rebate Credit.

Economic Impact Payments were based on your 2018 or 2019 tax year information. The Recovery Rebate Credit is similar, except that the eligibility and the amount are based on 2020 information you include on your 2020 tax return.