IRS Tax Relief for Hurricane IRMA Victims

Just like the tax relief for Hurricane Harvey victims, IRS has also announced bunch of tax relief for Hurricane IRMA victims as well.

 

The details of the tax relief is below.

 

Extension in Dates of Tax Return Filing

Hurricane IRMA victims now have till Jan 31, 2018 to file their respective tax returns. This include individual, business, quarterly payroll as well as the excise tax returns.

Additionally, certain tax payments owed to IRS by the taxpayers can also be delayed till Jan 31, 2018.

The relief also includes additional filing extension for individuals and businesses whose extensions run out on October 16 and September 15 respectively.

 

Which Areas are Eligible to Claim the Relief?

The relief is offered to areas in Florida designated by the Federal Emergency Management Agency (FEMA) as qualifying for either individual assistance or public assistance in Florida.

 

More information specific to this relief can be found here:

 

Diesel Fuel Penalty Waiver In Florida

Due to the shortage of “Undyed” diesel fuel caused by Hurricane Irma, IRS has waived penalty on the usage or sale of dyed diesel fuel in the state of Florida.

This waiver also applies on the usage of dyed diesel fuel on highway.

In addition to the persons who sell or use dyed diesel fuel, this waiver also applies to the vehicle operators only if they pay the tax of 24.4 cents per gallons.

 

Duration of This Relief

This relief applies from September 7, 2017 till September 22, 2017

 

You can read more about this relief here

 

Retirement Plans Can Now Make Loans to Hurricane Irma Victims

IRS has allowed the retirement plan holders such as 401(K) and similar employer sponsored retirement plans to make loans and and hardship allowance to the victims of Hurricane Irma and member of their families.

This also means that now the person who holds the retirement plan (and even may be living outside the disaster area) can take out funds from it and to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.

IRS has also announced to ease up some procedural and administrative steps so that the people have quick access to their money.

However, under the current relief, the withdrawals are now subject to 10% early withdrawal tax.

Normally, the retirement plans withdrawals are tax free provided that they are repaid in five years or less.

 

Regions Eligible for this Relief

Loans and hardships allowances from the retirement plans can be made to the victims in the areas who work or live in “disaster” areas.

You can get the complete list from FEMA’s website.

 

Additionally, to read more about this relief, click here.

 

Leave Based Donation Program

According to this relief, employees can now donate their leaves (sick or personal) and vacations to the victims of hurricane IRMA.

The employees can now forgo their cash payments that they earn while forgoing their designated leaves. The payments should be made before Jan 1, 2019.

The donated payments will not be considered as income or wages of the employees. Similarly, employers can claim the donates payments as business expense.

 

Learn more about this relief over here

 

Summary

Let’s summarize all the relieves provided by IRS to Hurricane Irma victims:

 

  1. All the returns filing and tax payments dates have been extended till January 31, 2018. This include individual, business, payroll and certain excise tax returns.
  2. IRS has waived off penalty on the sale and usage of dyed diesel. The vehicle operators may need to pay tax of 24.4 cents per gallon though.
  3. Loans and hardship allowances can now be given to the hurricane Irma victims from retirement plans. The retirement plans include 401(K) and other employer sponsored retirement plans.
  4. Employees can donate their sick or personal leaves and vacations to the Irma victims. This donation will not be considered as wages or income for employees and employers can deduct them as business expenses.

 

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