Following the recent destruction caused by Hurricane Laura, the IRS announced tax relief for those impacted and in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. This includes Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis and Vernon parishes in Louisiana. Taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.
The relief postpones various tax filing and payment deadlines that occurred starting on August 22, 2020. As a result, the victims of hurricane Laura have until December 31, 2020 to file certain individual and business tax returns, and make certain tax payments. This includes:
- 2019 Extended Individual and Business Tax Returns – An additional filing extension is granted until December 31, 2020 for individual taxpayers who filed valid 2019 tax extensions with an October 15, 2020 extended tax deadline. The IRS noted, however, if tax payments were owed on 2019 tax returns those payments are not eligible for extended relief since they were due on July 15, 2020. Businesses with extensions until October 15 also have the additional time to file until December 31, 2020.
- 2020 Quarterly Estimated Tax Payments – The third 2020 quarterly estimated tax deadline of September 15, 2020 is extended until December 31, 2020.
- Quarterly Payroll and Excise Tax Returns – Quarterly payroll and excise tax returns that are due November 2, 2020 are extended until December 31, 2020. In addition, penalties on payroll and excise tax deposits due after Aug. 22 and before Sept. 8, will be abated as long as the deposits are made by Sept. 8, 2020.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. As a result, 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.
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 an 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 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 tax year 2020 return filed in 2021), or the loss can be deducted on the tax return for the prior year (2019). Be sure to write the FEMA declaration number – 4559 − for Hurricane Laura in Louisiana on any return claiming a loss.
For more information about available disaster recovery, visit disasterassistance.gov. Also, check back with the TurboTax blog for more updates.