FRANKFORT, Ky. — Gov. Andy Beshear has announced the Kentucky Department of Revenue will honor the recently announced IRS special tax relief for taxpayers in any area designated by the Federal Emergency Management Agency as qualifying for individual assistance or public assistance due to the recent flooding that caused extensive damage in parts of Eastern Kentucky.
Individuals and households affected by severe flooding who reside or have a business in Breathitt, Clay, Floyd, Johnson, Knott, Leslie, Letcher, Magoffin, Martin, Owsley, Perry, Pike and Wolfe counties qualify for income tax relief. Affected taxpayers with a valid extension will have until Nov. 15, 2022, to file Kentucky tax returns for individual income tax, corporate income tax and limited liability entity tax. Tax payments related to these returns were due on April 18, 2022; therefore, payments are not eligible for this relief.
Estimated income tax payments due on Sept. 15, 2022, are also allowed an extension until Nov. 15, 2022. Payroll withholding filings and payments due between July 26 and Nov. 15, 2022, are also eligible for this extension.
Late filing and payment penalties will be waived for those affected taxpayers seeking relief based on the tax category described above. Kentucky’s tax laws do not allow interest to be waived due to natural disasters. 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 Flood Relief.”
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 specified counties covered under a federal disaster relief declaration for individual assistance.
As of Aug. 4, 2022, counties determined by FEMA to be eligible for individual assistance are Breathitt, Clay, Floyd, Knott, Letcher, Owsley, Perry and Pike. This sales tax relief may be expanded to include other counties based upon future FEMA amended declarations.
Refunds apply to purchases made on or after 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 DOR. 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 is also providing 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 for businesses in all counties covered by the current disaster relief declarations.
Lost Tax Records
Individuals and businesses that lost tax records in the floods may request replacement copies. Instructions for how taxpayers may request income tax returns are available on DOR’s website.
Taxpayers requiring additional information or assistance on individual income taxes may contact DOR at 502-564-4581 or [email protected].
For more information on flooding response efforts visit the Governor’s flood resources page.