IRS provides relief for taxpayers affected by Hurricane Idalia

The IRS has announced disaster relief extending federal tax deadlines for taxpayers in certain Florida and Georgia counties as well as all of South Carolina to Feb. 15, 2024. This relief is in response to Hurricane Idalia and Federal Emergency Management Agency’s (FEMA’s) resulting disaster area declarations.

Federal tax deadline relief eligibility

The covered disaster area includes the following counties in Florida:

Alachua, Baker, Bay, Bradford, Brevard, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hardee, Hernando, Hillsborough, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Nassau, Orange, Osceola, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, Sumter, Suwannee, Taylor, Union, Volusia and Wakulla

Relief is also provided to these Georgia counties:

Appling, Atkinson, Bacon, Berrien, Brantley, Brooks, Bulloch, Camden, Candler, Charlton, Clinch, Coffee, Colquitt, Cook, Echols, Emanuel, Glynn, Jeff Davis, Jenkins, Lanier, Lowndes, Pierce, Screven, Tattnall, Thomas, Tift, Ware, and Wayne

In addition, all forty-six counties in the state of South Carolina qualify for relief.

The federal tax relief applies to:

• Individuals who live in the covered disaster area,
• Businesses (including tax-exempt organizations) whose principal place of business is located in the covered disaster area,
• Certain relief workers in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster, and
• Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline are in the covered disaster area.

Taxpayers qualifying for relief but living outside the disaster area should contact the IRS at 866-562-5227.

Relief provided

Affected individuals and businesses will have until Feb. 15, 2024 to file most tax returns (individual, corporate, estate and trust income tax returns; partnership returns, S corporation returns and trust returns; estate, gift, and generation-skipping transfer tax returns; annual information returns of tax-exempt organizations; and employments and certain excise tax returns) and pay any taxes that were originally due. Included are:

• Individuals who had a valid extension to file their 2022 return due Oct. 16, 2023. However, since tax payments related to 2022 returns were due on April 18, 2023, those payments are not eligible for this relief.
• Quarterly estimated income tax payments due Sept. 15, 2023, and Jan. 16, 2024.
• Quarterly payroll and excise tax returns due Oct. 31, 2023, and Jan. 31, 2024.
• 2022 returns for calendar-year partnerships and S corporations extended to Sept. 15, 2023.
• 2022 calendar-year corporations extended to Oct. 16, 2023.
• 2022 calendar-year tax-exempt organizations extended to Nov. 15, 2023.

The relief does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; Forms 1042-S, 3921, 2933 or 8027; or to employment and excise tax deposits. However, for affected Florida taxpayers, penalties on payroll and excise tax deposits due on or after Aug. 27, 2023 and before Sept. 11, 2023 will be abated as long as the tax deposits were paid by Sept. 11, 2023. Impacted Georgia taxpayers with payroll and excise tax deposits due on or after Aug. 30 and before Sept. 14, 2023, will have penalties abated if these payments are made by Sept. 14, 2023. The penalty abatement period for affected South Carolina taxpayers runs from Aug. 29, 2023 through Sept. 13, 2023 with deposits needing to be made by Sept. 13, 2023.

Casualty losses

Affected taxpayers with casualty losses attributable to the federally declared disaster may elect to take losses into account either in the tax year the loss occurred, or the prior tax year. Those taxpayers choosing to claim their losses on the 2022 return have until Oct. 15, 2024 to make this election. If taking a disaster loss, taxpayers must include the appropriate FEMA disaster declaration number on the impacted tax return.

Other relief

Subject to plan rules, certain taxpayers may be eligible to take a special disaster distribution from their retirement plan without incurring the additional 10% early distribution tax and potentially spread the income recognition over three tax years. In addition, affected taxpayers may exclude certain payments received from a government agency from gross income. Payments received would have to be for reasonable and necessary personal, family, living or funeral expenses as well as the repair or rehabilitation of their personal residence and its contents.

Questions?

Please reach out to your Baker Tilly advisor if you have questions regarding how the federal and tax deadline relief affects you.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.