UPDATE: State Department of Revenue adopts Federal tax extension

Applies to various individual and business tax returns and tax payments

UPDATE POSTED DECEMBER 16, 2021 AT 4:01 P.M.

FRANKFORT, Ky. (WTVQ/Press Release) – Gov. Andy Beshear today announced that the Kentucky Department of Revenue (DOR) will honor the recently announced IRS special tax relief for taxpayers in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance due to the tornados that caused extensive damage in parts of Western Kentucky and surrounding areas on Dec. 10-11, 2021.

Under the provisions of KRS 131.081(11), Kentucky honors federal extensions related to disaster relief for filing of income tax returns, including payment of tax due. This extension to file and pay taxes does not apply to sales tax and other type of taxes. However, taxpayers with disaster-related delays who are seeking filing extensions or have been assessed penalties for taxes other than income may contact DOR to request an extension or a waiver of penalties.

Individuals and households affected by severe storms, tornados and flooding who reside or have a business in Caldwell, Fulton, Graves, Hopkins, Marshall, Muhlenberg, Taylor and Warren counties qualify for this tax relief. DOR will provide the same relief to any additional counties designated by FEMA in Kentucky or neighboring states.

This extension allows affected taxpayers until May 16, 2022 to file Kentucky income tax returns and submit tax payments for individual income tax, corporate income tax, income tax withholding, and limited liability entity tax. For instance, certain deadlines falling on or after Dec. 10, 2021 are postponed through May 16, 2022. This includes the April 18, 2022 deadline for filing 2021 individual and business income tax returns and paying any tax due. The May 16, 2022 deadline also applies to the fourth quarter 2021 estimated tax payment of income tax, normally due on Jan. 18, 2022, and the first quarter 2022 payment normally due on April 18, 2022.

“At a time of such unimaginable loss, we want to eliminate any unnecessary burdens so that our people can take care of their loved ones and get their lives back on track,” said Gov. Beshear. “This extension allows taxpayers affected by these devasting storms additional time to submit their quarterly payments due, as well providing an extension on filing their 2021 returns. Among other things, this also means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due Jan. 18, 2022, and instead include it with the 2021 return they file, on or before May 16, 2022.”

Late filing and payment penalties will be waived for those affected taxpayers seeking this relief. Kentucky’s tax laws have no provision for the waiver of interest.

Taxpayers are advised to label the top margin of the tax forms filed under this relief provision in large, red letters with the words “Kentucky Tornado Relief.”

Taxpayers requiring additional information or assistance on individual income taxes may contact the Department of Revenue at (502) 564-4581.

Sales and Use tax refunds, filing extension

The federal disaster declaration also activates the provisions of KRS 139.519, which provides for a refund of Kentucky sales and use tax paid for building materials permanently installed in the repair or replacement of structures damaged in counties covered under a federal disaster relief declaration.

Refunds apply to purchases made on or after Dec. 12, 2021, the date of the Federal disaster declaration for individual relief. Applicants have three years from the date the area is declared a federal disaster to submit their refund claims to the Kentucky Department of Revenue. Click here for answers to frequently asked questions.

Kentucky Administrative Regulation 103 KAR 31:170 provides guidelines for how to submit a refund request with the required proper documentation. The applicable forms for property owners for completed repairs or reconstruction of buildings damaged or destroyed in the disaster areas are available here. Individuals in need of more personalized assistance may call 502-564-5170 and select Option 1.

DOR will also provide a 30-day extension on the filing of returns for sales and excise taxes along with waivers of any penalty for late filings and payments related to the current disaster impact.

Any taxpayers seeking extensions for sales and use taxes may contact the Sales and Use Tax Division at (502) 564-5170.

Lost tax records

Individuals and businesses that lost tax records as a result of the tornado and associated storm damage may request replacement copies from DOR. Instructions for how taxpayers may request income tax returns is available on DOR’s website.

Taxpayers requiring additional information or assistance on individual income taxes may contact the Department of Revenue at (502) 564-4581 or contact us online.

For questions related to Corporation Income Tax and Pass-through Entities, contact (502) 564-8139.

ORIGINAL STORY POSTED DECEMBER 14, 2021 AT 10:57 A.M.

WASHINGTON – Victims of this weekend’s tornadoes in Kentucky will have until May 16, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

Following the recent disaster declaration issued by the Federal Emergency Management Agency (FEMA<http://www.fema.gov/>), the IRS is providing this relief to taxpayers affected by storms, tornadoes and flooding that took place starting on Dec. 10 in parts of Kentucky.

Currently, relief is available to affected taxpayers who live or have a business in Caldwell, Fulton, Graves, Hopkins, Marshall, Muhlenberg, Taylor and Warren counties. But the IRS will provide the same relief to any other localities designated by FEMA in Kentucky or neighboring states. The current list of eligible localities is always available on the disaster relief<https://www.irs.gov/newsroom/tax-relief-in-disaster-situations> page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Dec. 10. As a result, affected individuals and businesses will have until May 16 to file returns and pay any taxes that were originally due during this period. This includes 2021 individual income tax returns due on April 18, as well as various 2021 business returns normally due on March 15 and April 18. Among other things, this means that affected taxpayers will have until May 16 to make 2021 IRA contributions.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due.

The May 16 deadline also applies to quarterly estimated income tax payments due on Jan. 18 and April 18. Among other things, this means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due Jan. 18, 2022, and instead include it with the 2021 return they file, on or before May 16. In addition, the quarterly payroll and excise tax returns normally due on Jan. 31 and May 2, 2022 are also now due on May 16.

In addition, penalties on payroll and excise tax deposits due on or after Dec. 10 and before Dec. 27 will be abated as long as the deposits are made by Dec. 27, 2021.
The IRS disaster relief<https://www.irs.gov/businesses/small-businesses-self-employed/disaster-assistance-and-emergency-relief-for-individuals-and-businesses> page has details on other returns, payments and tax-related actions qualifying for the additional time.

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.

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, 2020 in this instance. Be sure to write the FEMA declaration number – 4630DR − on any return claiming a loss. See Publication 547<https://www.irs.gov/forms-pubs/about-publication-547> for details.