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Tax relief for hurricane Lee victims in Maine and Massachusetts

Tax relief for hurricane Lee victims in Maine and Massachusetts

The Internal Revenue Service (IRS) has recently made an announcement regarding tax relief measures for those affected by Hurricane Lee in both Maine and Massachusetts.

Announcement details

The IRS has declared that individuals and businesses that have been impacted by Hurricane Lee in Maine and Massachusetts are now eligible for tax relief.

The new deadline for filing various federal individual and business tax returns and making tax payments has been extended to Feb. 15, 2024.

"The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). All 16 counties in Maine and all 14 counties in Massachusetts qualify."

Filing and payment relief

Postponement period

The tax relief postpones various tax filing and payment deadlines that occurred from Sept. 15, 2023, through Feb. 15, 2024.

Consequently, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.

Specific deadlines

The Feb. 15, 2024, deadline will now apply to:

  • Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. However, it's crucial to note that tax payments related to these 2022 returns were due on April 18, 2023, and are not eligible for this relief.
    "So, this is more time to file than to pay."
  • Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
  • Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
  • Calendar-year partnerships, S corporations, corporations, and tax-exempt organizations with 2022 extensions running out between Sept. 15 and Nov. 15, 2023.

Furthermore, penalties for failing to make payroll and excise tax deposits due between Sept. 15 and Oct. 2, 2023, will be waived if the deposits are made by Oct. 2, 2023.

For more details on other returns, payments, and tax-related actions qualifying for relief during the postponement period, taxpayers can refer to the IRS disaster assistance and emergency relief page.

Automatic relief and special circumstances

The IRS will automatically provide filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

However, there might be situations where an affected taxpayer may not have an IRS address of record located in the disaster area. In such unique circumstances, if the taxpayer receives a late filing or late payment penalty notice from the IRS for the postponement period, they should contact the IRS immediately.

Additional tax relief

Disaster-related losses

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred or the return for the prior year.

Taxpayers have extra time to make this election and should mention the FEMA declaration number on any return claiming a loss.

Qualified disaster relief payments

Such payments are generally excluded from gross income. This means that affected taxpayers can exclude amounts received from a government agency for necessary expenses or for the repair of their home and its contents.

Retirement plans and IRAs

Taxpayers who participate in a retirement plan or individual retirement arrangement (IRA) may be eligible for additional relief, such as special disaster distributions or hardship withdrawals.

Future provisions and additional information

The IRS may provide additional disaster relief in the future. The tax relief is part of a coordinated federal response to the damage caused by Hurricane Lee and is based on local damage assessments by FEMA.

For more information on disaster recovery, taxpayers can visit DisasterAssistance.gov.

Ines Zemelman, EA
Founder of TFX