Disaster Victims Qualify for Tax Relief

IRS has announced on its website that victims of severe storms and flooding in counties designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Certain other time-sensitive acts also are postponed. This article summarizes the relief that’s available and disaster area designations and extended filing and deposit dates.

Who gets relief?  Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers include:

  • Any individual whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas;
  • Any individual who is a relief worker assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations;
  • Any individual whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;
  • Any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and
  • Any spouse of an affected taxpayer, solely with regard to a joint return of the husband and wife.

What may be postponed?  Under Code Sec. 7508A, IRS gives affected taxpayers until the extended date (specified by county) to file most tax returns (including individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after the onset date of the disaster (specified by county), and on or before the extended date.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. Likewise, the postponement does not apply to employment and excise tax deposits. IRS, however, will abate penalties for failure to make timely employment and excise deposits, due on or after the onset date of the disaster, and on or before the deposit delayed date (specified by county), provided the taxpayer made these deposits by the deposit delayed date.

A few of the specific states are listed below.  Contact our office for more information on these and other areas if you or your business were impacted by recent weather events.

Arkansas: The following are federal disaster areas qualifying for individual assistance on account of severe storms and flooding that took place on May 21, 2019: Arkansas, Conway, Crawford, Desha, Faulkner, Jefferson, Logan, Perry, Pope, Pulaski, Sebastian, and Yell counties counties.

For these Arkansas counties, the onset date of the disaster was May 21, 2019 and the extended date is Sept. 30, 2019 (which includes the quarterly estimated income tax payment due on June 17, 2019, as well as the employment and excise tax returns due on July 31, 2019). The deposit delayed date was June 5, 2019.

Oklahoma: The following are federal disaster areas qualifying for individual assistance on account of severe storms, tornadoes, straight-line winds, and flooding that took place on May 7, 2019: Canadian, Cherokee, Creek, Delaware, Kay, Le Flore, Logan, Mayes, Muskogee, Noble, Nowata, Okmulgee, Osage, Ottawa, Payne, Pottawatomie, Rogers, Sequoyah, Tulsa, Wagoner, and Washington counties.

For these Oklahoma counties, the onset date of the disaster was May 7, 2019, and the extended date is Sept. 16, 2019 (which includes the quarterly estimated income tax payment due on June 17, 2019, as well as the employment and excise tax returns due on July 31, 2019). The deposit delayed date was May 22, 2019.