Disaster Relief for Hurricanes Irma, Harvey and Maria Victims

Hurricane season has hopefully seen its climax in the Northern Hemisphere for 2017. The IRS is offering tax relief for victims of Hurricanes Harvey and Irma, and has extended that relief to victims of Hurricane Maria. In general, the IRS said it is now providing relief to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, along with parts of Texas. The relief postpones various tax deadlines, giving individual and business taxpayers until January 31, 2018 to file any returns and pay any taxes due.

Those eligible for the extra time include:

• Individual filers whose tax-filing extension runs out on October 16, 2017. Because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.
• Business filers, such as calendar-year partnerships, whose extensions ran out on September 15, 2017.
• Quarterly estimated tax payments due on September 15, 2017 and January 16, 2018.
• Quarterly payroll and excise tax returns due on October 31, 2017.
• Calendar-year tax-exempt organizations whose 2016 extensions run out on November 15, 2017.

See the disaster relief page on the IRS website (https://www.irs.gov/newsroom/tax-relief-in-disaster-situations) for details about the other kinds of tax relief furnished by the IRS in response to the recent hurricanes. The IRS said it is continuing to closely monitor the aftermath of the various storms, and more updates for taxpayers and tax professionals will be posted to IRS.gov.

Besides additional time to file and pay, the IRS provides other special assistance to disaster-area taxpayers, including:

• Special relief helps employer-sponsored leave-based donation programs that aid hurricane victims. Under these programs, employees can decide to forgo their vacation, sick or personal leave in exchange for cash payments the employer makes, before January 1, 2019, to charities offering relief. Donated leave isn’t included in the employee’s income, and employers can deduct these cash payments to charity as a business expense.
• 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to hurricane victims and members of their families. Under this broad-based relief, a retirement plan can allow a hurricane victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or dependent who lived or worked in the disaster area. Hardship withdrawals must be made by January 31, 2018.
• The IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period. See the disaster relief page for the time periods that apply to each jurisdiction.
• Individuals and businesses who have suffered uninsured or unreimbursed disaster-related losses can opt to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016).
• The IRS is waiving the typical fees and expediting requests for copies of previously filed tax returns for disaster area taxpayers. The relief can be particularly helpful to anyone whose copies of these documents were lost or destroyed by the hurricane.
• If disaster-area taxpayers are contacted by the IRS on a collection or examination matter, they should be sure to explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case. ~ Jennifer Johnson