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14936: TX - Tax Relief for Victims of Hurricane Harvey


Hurricane + Disaster Relief

IRS Gives Tax Relief to Victims of Hurricane Harvey; Parts of Texas Now Eligible; Extension Filers Have Until January 31 to File

 

August 28, 2017 IRS Newswire IR-2017-135 

"WASHINGTON –– Hurricane Harvey victims in parts of Texas have until January 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.

This includes an additional filing extension for taxpayers with valid extensions that run out on October 16, and businesses with extensions that run out on September 15.

"This has been a devastating storm, and the IRS will move quickly to provide tax relief to hurricane victims," said IRS Commissioner John Koskinen. "The IRS will continue to closely monitor the storm's aftermath, and we anticipate providing additional relief for other affected areas in the near future."

The IRS is now offering this expanded relief to any area designated by the Federal Emergency Management Agency (FEMA), as qualifying for individual assistance. Currently, 18 counties are eligible, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 23, 2017. As a result, affected individuals and businesses will have until January 31, 2018, to file returns and pay any taxes that were originally due during this period. This includes the September 15, 2017 and January 16, 2018 deadlines for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until October 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

A variety of business tax deadlines are also affected including the October 31 deadline for quarterly payroll and excise tax returns. In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after August 23 and before September 7, if the deposits are made by September 7, 2017. Details on available relief can be found on the disaster relief page on IRS.gov.

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.

In addition, 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.

Individuals and businesses who suffered uninsured or un-reimbursed disaster-related losses can choose 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). See Publication 547 for details.

Currently, the following Texas counties are eligible for relief: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton.

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

Update 8/30/17 IRS Guidewire A-2017-11

"Announcement 2017-11 provides relief to victims of Hurricane Harvey, which caused damage to parts of Texas.  It permits easier access to victims’ funds held in workplace retirement plans and in IRAs, for the period beginning August 23, 2017, and ending January 31, 2018.  The relief provided in the announcement is in addition to the relief already provided by the IRS pursuant to News Release IR-2017-135.

The guidance will appear in IRB 2017-39 dated September 25, 2017."

In Drake Tax

For applicable taxpayers to receive the relief indicated above, nothing is required to be entered or indicated if the taxpayer’s mailing address is in the FEMA disaster area.

Taxpayers with a mailing address outside the disaster area that qualify for relief will need to contact the IRS at 866-562-5227.

  • Note: taxpayers living outside of the disaster area may also qualify for relief if their tax preparer was affected. Both situations must apply:
    • the preparer is in the disaster area, and
    • the preparer is unable to file or pay on the taxpayer's behalf.

In Drake16 and prior, the disaster designation on the PRNT screen is for state use only; an entry in that field will not appear on or affect the federal return. 

Starting in Drake17, a Disaster Designation drop down has been added to the MISC screen and the state-only entry was removed from the PRNT screen. This drop down should be used to indicate if the return is subject to disaster special rules. The most common disasters are listed. For any applicable disasters not listed, you can manually enter it in the box below. 


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