Tax Relief Opportunities for Victims of Hurricane Ida & Other Recent Disasters

Thoughtware Alert Published: Sep 14, 2021
Pillars on a Government building

Federal Emergency Management Agency (FEMA) recently announced major disaster declarations for several states due to severe storms, wildfires, flooding, and Hurricane Ida. Following these announcements, the IRS is offering tax relief for qualifying taxpayers in certain states and counties. As of the date of this publication, individuals or businesses located in the following disaster areas may qualify for tax relief:

  • California: Lassen, Nevada, Placer, Plumas
  • Louisiana: All counties
  • Mississippi: All counties and the Mississippi Choctaw Indian Reservation
  • New Jersey: Bergen, Gloucester, Hunterdon, Middlesex, Passaic, Somerset
  • New York: Bronx, Kings, New York, Queens, Richmond, Westchester
  • North Carolina: Avery, Buncombe, Haywood, Madison, Transylvania, Watauga, Yancey
  • Pennsylvania: Bucks, Chester, Delaware, Montgomery, Philadelphia, York
  • Tennessee: Dickson, Hickman, Houston, Humphreys

Filing/Payment Deadline Relief

California

Taxpayers required to file returns with an original or extended due date on or after July 14, 2021, and before November 15, 2021, with an address of record in an identified disaster area have until November 15, 2021, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations.

Taxpayers with an estimated income tax payment originally due on September 15 won’t be subject to penalties for failure to pay estimated tax installments if such payments are made on or before November 15, 2021.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after July 14, 2021, and before July 29, 2021, will be abated as long as the tax deposits were made by July 29, 2021.

Louisiana

Taxpayers required to file returns with an original or extended due date on or after August 26, 2021, and before January 3, 2022, with an address of record in an identified disaster area have until January 3, 2022, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations. This means that individuals who had a valid extension to file their 2020 returns, due to run out on October 15, will now have until January 3, 2022, to file.

Taxpayers with a quarterly estimated income tax payment originally due on or after August 26, 2021, and before January 3, 2022, won’t be subject to penalties for failure to pay estimated tax installments if such payments are made on or before January 3, 2022.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after August 26, 2021, and before September 10, 2021, will be abated as long as the tax deposits were made by September 10, 2021.

Mississippi

Taxpayers required to file returns with an original or extended due date on or after August 28, 2021, and before November 1, 2021, with an address of record in an identified disaster area have until November 1, 2021, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations. The November 1, 2021, deadline also applies to quarterly estimated income tax payments due on September 15, 2021.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after August 28, 2021, and before September 13, 2021, will be abated as long as the tax deposits are made by September 13, 2021.

New Jersey & New York

Taxpayers required to file returns with an original or extended due date on or after September 1, 2021, and before January 3, 2022, with an address of record in an identified disaster area have until January 3, 2022, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations.

This means that individuals who had a valid extension to file their 2020 returns, due on October 15, will now have until January 3, 2022, to file. However, because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

Taxpayers with a quarterly estimated income tax payment originally due on September 15 won’t be subject to penalties for failure to pay estimated tax installments if such payments are made on or before January 3, 2022.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after September 1, 2021, and before September 16, 2021, will be abated as long as the tax deposits are made by September 16, 2021.

North Carolina

Taxpayers required to file returns with an original or extended due date on or after August 16, 2021, and before December 15, 2021, with an address of record in an identified disaster area have until December 15, 2021, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations. The December 15, 2021, deadline also applies to quarterly estimated income tax payments due on September 15, 2021.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after August 16, 2021, and before August 31, 2021, will be abated as long as the tax deposits were made by August 31, 2021.

Pennsylvania

Taxpayers required to file returns with an original or extended due date on or after August 31, 2021, and before January 3, 2022, with an address of record in an identified disaster area have until January 3, 2022, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations. The January 3, 2022, deadline also applies to quarterly estimated income tax payments due on September 15, 2021.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after August 31, 2021, and before September 15, 2021, will be abated as long as the tax deposits are made by September 15, 2021.

Tennessee

Taxpayers required to file returns with an original or extended due date on or after August 21, 2021, and before January 3, 2022, with an address of record in an identified disaster area have until January 3, 2022, to file most tax returns—including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; Form 5500 series returns and employment and certain excise tax returns; and annual information returns of tax-exempt organizations.

Taxpayers with an estimated income tax payment originally due on or after August 21, 2021, and before January 3, 2022, won’t be subject to penalties for failure to pay estimated tax installments if such payments are made on or before January 3, 2022.

Postponement of time to file and pay doesn’t apply to information returns in the W-2, 1094, 1095, 1097, 1098, or 1099 series; to Forms 1042-S, 3921, 3922, or 8027; or to employment and excise tax deposits. Penalties for deposits due on or after August 21, 2021, and before September 7, 2021, will be abated as long as the tax deposits were made by September 7, 2021.

Loss Reporting

Affected taxpayers in a federally declared disaster area have the option to claim disaster-related casualty losses on their federal income tax returns either in the tax year of the loss or on the prior year’s return. Claiming the loss on an original or amended return for the prior tax year may provide more timely benefits, but consideration should be given to yearly tax rate differences and other taxpayer-specific factors.

Contributions to Disaster Victims

There are many outlets organizing assistance for disaster victims. Please exercise caution while selecting organizations to receive your contributions. Philanthropists can evaluate an unfamiliar organization by verifying its tax-exempt status and how it spends its contributions through the Tax-Exempt Organization Search website.

Action Required

Federal late filing or late payment penalties for qualifying taxpayers should automatically be abated if the address requirements are met. If taxpayers receive a penalty assessment despite having a qualifying address of record, they should contact the IRS at the number on the notice to request abatement under the disaster relief provisions.

Taxpayers affected by these disasters who reside or have a business outside the covered disaster area should call the IRS disaster hotline at 866.562.5227 to request the above federal relief. Additional information and contacts are available on the government’s Disaster Assistance website.

For more information, reach out to your BKD Trusted Advisor™ or use the Contact Us form below.

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