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IRS Extends Tax Hardship Relief to Victims of Hurricanes Harvey, Irma, and Maria

Compliance
Article
10/09/2017
  • The IRS is giving tax filing relief to eligible taxpayers residing or owning businesses in FEMA-designated disaster areas in Florida, Georgia, Puerto Rico, the Virgin Islands, and parts of Texas.
  • These areas were devastated by Hurricanes Harvey, Irma, or Maria.
  • Affected taxpayers whose tax-filing extension runs out on Oct. 16, 2017, will have until Jan. 31, 2018 to file their 2016 returns.
  • The relief includes the filing of Form 5500, providing an automatic extended filing deadline of Jan. 31, 2018.
  • Affected taxpayers with tax returns due on or after Sept. 4, 2017, have until Jan. 31, 2018 to file their 2016 returns.
  • Affected businesses filing Form 5500 have an automatic extended filing deadline of Jan. 31, 2018.
  • Numerous other tax deadlines are postponed for eligible storm survivors.

The Internal Revenue Service (IRS) is giving tax filing relief to affected taxpayers residing or owning businesses in FEMA-designated disaster areas that encompass Florida, Georgia, Puerto Rico, the U.S. Virgin Islands, and parts of Texas. FEMA is the Federal Emergency Management Agency. It delineated disaster areas following three major hurricanes that struck the United States and its territories in the past month:

  • Hurricane Harvey, which struck the Houston area, Louisiana, and neighboring Gulf Coast regions Aug. 23-Sept. 2, 2017.
  • Hurricane Irma, which lasted from Aug. 31 until Sept, 11 of 2017, affecting the U.S. Virgin Islands and nine states.
  • Hurricane Maria, which ravaged Puerto Rico on Sept. 20, 2017.

Affected taxpayers whose tax-filing extension runs out on October 16, 2017, will have until January 31, 2018, to file their 2016 returns. The relief also includes the annual retirement plan filing of Form 5500, with an automatic extended filing deadline of January 31, 2018. The IRS will automatically apply filing and any penalty relief to affected taxpayers located in the disaster areas.

Those affected by the storms but not in designated disaster areas will need to contact the IRS to request relief.

In addition, employers sponsoring retirement plans may allow expedited loans and hardship distributions for employee hurricane victims and members of their families. This relief allows a worker living outside a disaster area to take a retirement plan loan or hardship distribution and use the money to assist children, parents, grandparents, or other dependents who lived or worked in the FEMA designated disaster area. This relaxed loan and hardship withdrawal relief is available until January 31, 2018.

Eligibility specifics

To qualify for tax relief, an individual must reside or have a business in one of the covered disaster areas, which include:

  • Texas: The counties of Aransas, Austin, Bastrop, Bee, Bexar, Brazoria, Burleson, Calhoun, Chambers, Colorado, Dallas, De Witt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Grimes, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Madison, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tarrant, Travis, Tyler, Victoria, Walker, Waller, Washington, and Wharton.
  • U.S. Virgin Islands: The islands of St. Croix, St. John and St. Thomas.
  • Puerto Rico: All 78 municipalities.
  • Florida: All 67 counties.
  • Georgia: All 159 counties.

In addition, eligibility for post-hurricane tax filing relief requires that at least one of the following conditions apply:

  • The taxpayer’s place of business is in a covered disaster area.
  • Records necessary to file taxes are in the covered disaster area.
  • The taxpayer is a relief worker of a recognized government or philanthropic organization assisting in the covered disaster area.
  • The taxpayer was visiting the covered disaster area and was killed or injured as a result.

IRS structured to help those suffering in the wake of natural disasters

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not 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.

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Maree P Vahue, MBA, QKA, is a professionally accredited Retirement Services Compliance Analyst II for Paychex, Inc. based in Rochester, NY. Maree and her team are responsible for examining, researching, and communicating ERISA regulations to the Paychex retirement organization that provides recordkeeping for nearly 80,000 clients.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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