Following up on an announcement on Tax Day, the Internal Revenue Service (IRS) has announced relief for Texas storm victims, including those in the Houston area. Those affected taxpayers in Fayette, Grimes, Harris and Parker counties will have until September 1, 2016, to file their returns and pay any taxes due. All workers assisting in the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.
The announcement followed this week’s disaster declaration for individual assistance in the area by the Federal Emergency Management Agency (FEMA).
The tax relief applies to filing and payment deadlines that occurred starting on April 17, 2016. This includes 2015 income tax returns which were due on April 18 as well as the April 18 and June 15 deadlines for making quarterly estimated tax payments for individuals. A number of business tax deadlines are also affected, including the May 2 and August 1 deadlines for quarterly payroll and excise tax returns. The IRS will also waive late deposit penalties for federal payroll and excise tax deposits normally due on or after April 17 and before May 2 if the deposits are made by May 2, 2016.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. This means you do not need to contact the IRS to get this relief if you live in the disaster area. While there is normally no penalty for filing a late return when taxpayers are owed a refund, taxpayers who owe tax are generally subject to penalty and interest. If you are an affected taxpayer and you receive a late filing or late payment penalty notice from the IRS, you should call the number on the notice to have the penalty abated.
The IRS will also 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 the affected area (such as, for example, those whose tax preparers might be located in the affected area). Taxpayers qualifying for relief who live outside the disaster area do need to contact the IRS at 866.562.5227.
Individuals and businesses who suffered disaster-related losses not covered by insurance may be eligible for a tax break: the casualty loss deduction. You can choose to claim a casualty loss on either the return for the year the loss occurred (so, your 2016 return which you’ll file in 2017) or on an original or amended return for the prior year (that’s the 2015 tax year filed in 2016 for Houston storm victims).
More rain with the potential for flooding is expected in the Houston area today.
