IRS Provides Tax Relief for Victims of Hurricane Ida

Hurricane Ida, which began on August 26, barreled through the states of Louisiana and Mississippi, leaving millions without power and in a state of disaster. Many other states  also fell victim to the remnants of Hurricane Ida that caused flash floods and crippled areas in New York City, New Jersey, and Pennsylvania. If you were impacted by Hurricane Ida we want you to know TurboTax is here for you, and we want to keep you up to date with important tax relief information that may help you in this time of need.

The Federal Emergency Management Agency (FEMA) declared the recent events as a disaster and the IRS announced that victims of Hurricane Ida in parts of Louisiana, New York, New Jersey, and Pennsylvania now have until January 3, 2022 and those victims in all parts of Mississippi now have additional time until January 3, 2022 as well to file various individual and business tax returns and make certain tax payments. Currently tax relief is available to the entire state of Louisiana, the entire state of Mississippi, as well as cities and counties in New York and New Jersey. Currently in Pennsylvania the following counties have been designated by FEMA to include Bucks, Chester, Delaware, Montgomery, Philadelphia and York. Taxpayers in certain Ida-impacted localities designated by FEMA will automatically receive the same filing and payment relief.  The current list of eligible localities is available on the disaster relief page on IRS.gov.

What are the extended tax and payment deadlines for victims of Hurricane Ida?

Louisiana 

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022 to file returns and pay any taxes that were originally due during this period. These include:

• 2020 Individual and Business Returns with Valid Extensions: Individuals that had a valid extension to file their 2020 return due to run out on October 15, 2021 will now have until January 3, 2022 to file. Businesses with extensions also have until January 3, 2022 including, among others, calendar-year corporations whose 2020 extensions run out on October 15, 2021. The IRS noted that because tax payments related to 2020 returns were due on May 17, 2021, those payments are not eligible for an extension.  
• Tax Year 2021 3rd Quarterly Estimated Tax Payment: Tax Year 2021 3rd quarter estimated tax payment with a deadline of September 15, 2021 has been extended until January 3, 2022.
• Quarterly Payroll and Excise Tax Returns: Quarterly payroll and excise tax returns that are normally due on November 1, 2021, are also extended until January 3, 2022. In addition, penalties on payroll and excise tax deposits due on or after August 26 and before September 10 will be abated as long as the deposits were made by September 10, 2021. 

Calendar-year tax-exempt organizations, operating on a calendar-year basis that have a valid 2020 tax return extension due to run out on November 15, 2021 also qualify for the extra time.

New York and New Jersey 

The tax relief postpones various tax filing and payment deadlines that occurred starting on September 1, 2021. As a result, affected individuals and businesses will have until January 3, 2022 to file returns and pay any taxes that were originally due during this period. These include:

• 2020 Individual and Business Returns with Valid Extensions: Individuals that had a valid extension to file their 2020 return due to run out on October 15, 2021 will now have until January 3, 2022 to file. Businesses with extensions also have until January 3, 2022 including, among others, calendar-year corporations whose 2020 extensions run out on October 15, 2021. The IRS noted that because tax payments related to 2020 returns were due on May 17, 2021, those payments are not eligible for an extension.  
• Tax Year 2021 3rd Quarterly Estimated Tax Payment: Tax Year 2021 3rd quarter estimated tax payment with a deadline of September 15, 2021 has been extended until January 3, 2022.
• Quarterly Payroll and Excise Tax Returns: Quarterly payroll and excise tax returns that are normally due on November 1, 2021, are also extended until January 3, 2022. In addition, penalties on payroll and excise tax deposits due on or after September 1 and before September 16 will be abated as long as the deposits were made by September 16, 2021. 

Calendar-year tax-exempt organizations, operating on a calendar-year basis that have a valid 2020 tax return extension due to run out on November 15, 2021 also qualify for the extra time.

Mississippi

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 28, 2021. As a result, affected individuals and businesses will have until January 3, 2022 to file returns and pay any taxes that were originally due during this period. These include:

• 2020 Individual and Business Returns with Valid Extensions: Individuals that had a valid extension to file their 2020 return due to run out on October 15, 2021 will now have until January 3, 2022  to file. Businesses with extensions also have until January 3, 2022 including, among others, calendar-year corporations whose 2020 extensions run out on October 15, 2021. The IRS noted that because tax payments related to 2020 returns were due on May 17, 2021, those payments are not eligible for an extension.  
• Tax Year 2021 3rd Quarterly Estimated Tax Payment: Tax Year 2021 3rd quarter estimated tax payment with a deadline of September 15, 2021 has been extended until January 3, 2022.
• Quarterly Payroll and Excise Tax Returns: Quarterly payroll and excise tax returns that are normally due on November 1, 2021, now have until January 3, 2022. In addition, penalties on payroll and excise tax deposits due on or after August 28 and before September 13 will be abated as long as the deposits were made by September 13, 2021. 

Calendar-year partnerships and S corporations whose 2020 extensions run out on September 15, 2021 also have until January 3, 2022.

Pennsylvania 

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 31, 2021. As a result, affected individuals and businesses will have until January 3, 2022 to file returns and pay any taxes that were originally due during this period. These include:

• 2020 Individual and Business Returns with Valid Extensions: Individuals that had a valid extension to file their 2020 return due to run out on October 15, 2021 will now have until January 3, 2022 to file. Businesses with extensions also have until January 3, 2022 including, among others, calendar-year partnerships and S-corporations whose 2020 extensions run out on September 15, 2021 and calendar year corporations whose 2020 extensions run out on October 15, 2021. The IRS noted that because tax payments related to 2020 returns were due on May 17, 2021, those payments are not eligible for an extension.  
• Tax Year 2021 3rd Quarterly Estimated Tax Payment: Tax Year 2021 3rd quarter estimated tax payment with a deadline of September 15, 2021 has been extended until January 3, 2022.
• Quarterly Payroll and Excise Tax Returns: Quarterly payroll and excise tax returns that are normally due on November 1, 2021, are also extended until January 3, 2022. In addition, penalties on payroll and excise tax deposits due on or after August 31 and before September 15 will be abated as long as the deposits were made by September 15, 2021. 

Calendar-year tax-exempt organizations, operating on a calendar-year basis that have a valid 2020 tax return extension due to run out on November 15, 2021 also qualify for the extra time.

What do I need to do to claim the tax extension? 

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. 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.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.

Do surrounding areas outside of Louisiana, New Jersey, New York, Mississippi, and Pennsylvania qualify for an extension? 

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.

How can I claim a casualty and property loss on my taxes if impacted?

Individuals or 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 2021 return filed in 2022), or the loss can be deducted on the tax return for the prior year (2020). Individuals may also deduct personal property losses that are not covered by insurance or other reimbursements. 

Be sure to write the following FEMA declaration number on any return claiming a loss:  

• 4611 − for Hurricane Ida in Louisiana 
• 4614 – for Hurricane Ida in New Jersey 
• 4615 – for Hurricane Ida in New York 
• EM-3569 for Hurricane Ida in Mississippi 
• DR-4618 for Hurricane Ida in Pennsylvania 

The tax relief is part of a coordinated federal response to the damage caused by the harsh storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

If you are not a victim, but you are looking to help those in need, this is a great opportunity to donate or volunteer your time to legitimate 501(c)(3) not-for-profit charities who are providing relief efforts for storm victims.

Check back with the TurboTax blog for more updates on disaster relief.