Arkansas residents in the three counties affected by the March 31 tornadoes will have until July 31 to file both their federal and state taxes.
The Internal Revenue Service announced the federal extension for Pulaski, Cross and Lonoke counties on April 3, four days after a tornado hit Little Rock and North Little Rock and another hit Wynne in east Arkansas.
Due to a disaster declaration issued by the Federal Emergency Management Agency, individuals and households that reside or have businesses in the three counties qualify for tax relief.
That's not just residents who were personally affected by the storms. That's any tax resident in those three counties.
"As long as they're in those counties, they tell by ZIP code," said Tim Brass, owner of ERGA Income Tax Inc. in Little Rock. "So if you owe taxes, you don't have to pay them until July 31. No penalty, no interest. ... I'm told they know by ZIP code that you're in a federal disaster area."
According to the IRS notice about the tax relief extension, it covers 2022 individual income tax returns due on April 18, as well as various 2022 business returns normally due on April 18. Eligible taxpayers will also have until July 31 to make 2022 contributions to their IRAs and health savings accounts.
The July 31 deadline also applies to any payment normally due during this period, including quarterly estimated tax payments and quarterly payroll and excise tax returns. In addition, penalties on payroll and excise tax deposits due on or after March 31 and before April 18 will be eased as long as the tax deposits are made by April 18, 2023.
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 that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
The deadline extensions for state-level taxes were put in place by Gov. Sarah Huckabee Sanders via two executive orders.
In an executive order signed Monday, Sanders ordered the secretary of the Department of Finance and Administration to extend the income tax filing date, income tax payment date, pass-through entity tax filing date and pass-through entity tax payment date from April 18 to July 31 for people who live or have businesses located in Pulaski, Lonoke and Cross counties.
The extension includes 2022 returns for individuals, Subchapter S Corporations, Subchapter C Corporations, Pass-Through Entities, Fiduciaries and Estates, Partnerships and Composite returns.
Sanders' order also waived a requirement for residents and business owners in the three counties to submit a written request for an extension to file an individual income tax return through July 31.
The order waives penalties for timely registering vehicles and renewing vehicle registrations and waives requirements for making payments for expedited title processing service and paying fees for duplicating driver's licenses, instruction permits and identification cards for residents of the three counties through July 31.
Sanders' first tax-based order was for the extension of the individual income tax filing date and individual income tax payment date from April 18 to July 31 for residents of the three affected counties.
Taxpayers can file for an extension electronically by April 18 if they feel more time is needed to complete the tax return before the July 31 deadline. This can be done for free using IRS Free File. For details about this and other electronic options, visit IRS.gov/Extensions.
The tax extension isn't just a relief for taxpayers. It also makes life easier for tax preparation companies like Brass's.
"It kind of gave us some relief," Brass said. "You know, we're always here at the end [of tax season], of course, so busy we don't know if we can get everybody finished, and we have stop taking new clients because we got so many piled up. But this relief gives us a little extra time."
When asked if he was glad when the extensions were announced, Brass said "yes and no."
"We like to be done [by] the normal deadline. But then again, it took a lot of pressure off of us."
Information for this report was provided by Will Langhorne of the Arkansas Democrat-Gazette.