Update: Relief now also includes New York, New Jersey, and Mississippi. To read more about the Mississippi tax relief, check out "Mississippi Gets Hurricane Ida Tax Relief."
The Internal Revenue Service has wasted no time in granting important tax relief to those most impacted by Hurricane Ida. The storm clouds that brought destruction to much of Louisiana and some counties in New York and New Jersey had barely cleared before the relief measures were announced.
These measures give hurricane victims in the federally declared disaster areas until Jan. 3, 2022, to file an array of individual and business tax returns, and to pay any tax due.
"During this difficult time, the IRS stands ready to help victims of Hurricane Ida," said IRS Commissioner Chuck Rettig. "We want people affected by this devastating hurricane focused on their safety and recovery for themselves and their families. To provide assistance now and in the weeks ahead, we have a variety of different types of relief available to help people and businesses affected by this disaster."
Currently, the entire state of Louisiana, as well as certain counties in New York and New Jersey, have been cleared for individual or public assistance by the Federal Emergency Management Agency (FEMA); but as other states and their counties are added to FEMA’s list of impacted locations, taxpayers in those areas will also be eligible for the IRS relief measures.
What are the details of the relief?
Generally, the IRS relief package takes various filing and payment deadlines for individuals and businesses that would have fallen on Aug. 26 or later, and pushes them back to Jan. 3, 2022.
This means taxpayers who had extensions to file their 2020 tax return by Oct. 15, 2021, now have until Jan. 3, 2022, to file their returns. However, it’s important to remember that since any payments of tax were due May 17—long before the date the relief package started—they’re not covered by the postponement.
Business filers also get a break with this relief package; quarterly estimated income tax payments normally due in September and quarterly payroll and excise tax returns usually filed in November have been rolled back to the Jan. 3, 2022 deadline for qualified filers.
This postponement also applies to tax-exempt groups that operate on a calendar-year basis with extensions that carry a Nov.15 deadline.
Businesses with extensions—including those calendar-year firms with 2020 extensions ending October 15—also get the additional time to file.
The IRS says any businesses with penalties on payroll and excise tax deposits that were due on or after August 26 and before September 10 will have their penalties abated if the deposits are made by September 10.
For more information on other returns, payments or actions qualifying for the relief, see the IRS disaster relief page on IRS.gov.
The application is automatic
There’s no need for taxpayers to contact the IRS to apply for the relief terms; the IRS automatically uses a taxpayer’s address of record to indicate whether their address is on the list of eligible states and localities.
However, if a taxpayer in the relief area gets a notice for filing late or paying a penalty late, the taxpayer should call the IRS so the penalty can be abated.
Taxpayers who qualify for the IRS relief measures but live outside the federal disaster area should call the IRS at 866.562.5227.
Relief workers in the disaster area who are part of a recognized government or philanthropic organization assisting in the recovery process also need to call the agency to obtain IRS relief.
The IRS also says it will work with taxpayers who live outside the specified disaster area, but whose records needed to meet a regular IRS deadline are located inside the affected area.
Taxpayers in a federally declared disaster area (individuals and businesses alike) have a choice when it comes to claiming their losses on a tax return. They can either claim the loss on the return for the year the loss occurred—in this case, the 2021 return normally filed next year—or on the return for the prior year.
In either case, filers should write the FEMA disaster declaration number for Hurricane Ida in Louisiana on returns that claim a loss: 4611. Get more details in Publication 547.
For more information on disaster recovery, including the coordinated response to Hurricane Ida, visit DisasterAssistance.gov.