The IRS recently announced tax relief for victims of Hurricane Harvey in parts of Texas, and Hurricane Irma in Georgia and parts of Florida, Puerto Rico and the Virgin Islands.
The relief postpones various tax filing and payment deadlines that occurred starting on Aug. 23, 2017 for Hurricane Harvey victims and starting on Sept. 4, 2017 for Hurricane Irma victims. As a result, the victims of both hurricanes have until Jan. 31, 2018 to file certain individual and business tax returns, and make certain tax payments. This includes:
- 2016 Extended Individual and Business Tax Returns – An additional filing extension is granted for individual taxpayers who filed 2016 tax extensions with an Oct. 16, 2017 tax deadline, and businesses with a Sept. 15, 2017 extended tax deadline. The IRS noted, however, if tax payments were owed on 2016 tax returns those payments are not eligible for extended relief since they were due on April 18, 2017.
- 2018 Quarterly Estimated Tax Payments – Quarterly estimated tax deadlines of Sept. 15, 2017 and Jan. 16, 2018 are extended until Jan. 31, 2018.
- Quarterly Payroll and Excise Tax Returns – Quarterly payroll and excise tax returns that are due Oct. 31, 2017 are extended until Jan. 31, 2018.
The IRS is offering this expanded relief to any area designated by the Federal Emergency Management Agency as qualifying for individual assistance.The current list of eligible localities and more information about relief is available at IRS.gov.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. As a result, taxpayers do not need to contact the IRS 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.
The IRS also announced that 401(K)s and similar employer-sponsored retirement plans can make loans and hardship distributions to hurricane victims and although IRA participants are barred from taking out loans, they may be eligible to receive distributions under more liberal procedures.
In addition, the IRS is also providing special relief to encourage leave-based donation programs to aid victims of Hurricane Harvey and Hurricane Irma.
Individuals and businesses who suffered uninsured or unreimbursed disaster-related casualty losses can choose to claim them on either the tax return for the year the loss occurred (in this instance, the 2017 return filed in 2018), or the loss can be deducted on the tax return for the prior year (2016).
The IRS also issued a recent news alert cautioning taxpayers about fake charity scams relating to Hurricane Harvey and tips for individuals who need to reconstruct records after a disaster.
Editor’s note: This article was updated on Sept. 18 to reflect recent relief the IRS announced for Hurricane Irma victims.