The IRS and the Texas Department of Revenue have announced relief programs for taxpayers in counties affected by Hurricane Harvey. The IRS and the Texas disaster declaration provide the list of counties currently eligible for relief.
The IRS relief postpones payment deadlines that occur from Aug. 23, 2017, through Jan. 31, 2018, for eligible taxpayers. The postponed deadlines include but are not limited to:
- Business tax filers with valid extensions through Sept. 15, 2017
- Individual and business tax filers with valid extensions through Oct. 16, 2017
- Quarterly estimated payments due Sept. 15, 2017, and Jan. 16, 2018
- Quarterly payroll and excise tax returns due Oct. 31, 2017
In addition, the IRS is providing the following relief:
- Late-deposit penalties are waived for federal payroll and excise tax deposits normally due on or after Aug. 23, 2017, and before Sept. 7, 2017, as long as the deposits are made by Sept. 7, 2017.
- Retirement plans can make hardship distributions and loans to eligible taxpayers.
- Loan proceeds generally are tax free if repaid over a period of five years or less.
- Hardship distributions generally are taxable and subject to a 10 percent early withdrawal tax.
- Employers may establish a leave-based donation program through which employees can donate their sick or personal employee leave in exchange for an employer-made cash payment to charitable organizations providing relief to victims of Hurricane Harvey.
- Cash payments must be made before Jan. 1, 2019.
- Donated leave is not included in employee taxable income or wages.
- The employer may deduct the cash payments as business expenses.
When processing returns, the IRS should automatically provide penalty relief for eligible taxpayers. Eligible taxpayers that receive a late-filing penalty notice should contact the number on the notice to request relief. Taxpayers who live or are located outside the disaster area but are affected because their records are located in the disaster area should contact the IRS if they need to request relief from filing deadlines. Complete information on all IRS relief programs can be found on the IRS website.
Taxpayers who are unable to meet a tax filing deadline due to Hurricane Harvey may be eligible for an extension of up to 90 days, but relief is not automatic – it must be directly requested by the taxpayer or an authorized designee and will be granted on a case-by-case basis from the Texas comptroller. It is likely the comptroller will provide additional guidance in the future.