Those victimized by Hurricane Ida are not alone during their time of need. The Internal Revenue Service (IRS) has benevolently postponed the tax filing deadline as well as the tax payment deadline for the victims of this storm.
Ida, a Category 4 hurricane, made landfall in Louisiana then combined with another storm in the northeast, flooding parts of New York and New Jersey. The IRS announced its decision to delay tax filing and payment due dates after the Federal Emergency Management Agency (FEMA) issued a disaster declaration. Here is a closer look at the details of the IRS extensions along with the assistance provided to small and medium-size businesses in affected areas.
Tax Relief Details in the Aftermath of Hurricane Ida
The IRS isn’t known for its altruism yet this wing of the federal government certainly deserves respect for its kind gesture following the nightmare that was Hurricane Ida. Those affected by the hurricane now have until the third of January to file returns and pay taxes that were originally due in the period. Those who had a legitimate extension to file a 2020 tax return that would have been due by October 15 can now wait all the way until January 3 to file. However, the IRS also stated tax payments related to such 2020 returns were due in mid-May so those payments do not qualify for the relief.
The IRS tax relief is available for those who live in areas designated by FEMA as eligible. Such tax relief is currently available for New Jersey, New York, Louisiana, Tennessee and Mississippi taxpayers. It is important to note the January deadline in both New Jersey and New York is applicable to estimated income tax payments for those who pay once per quarter. Such payments are due on the quarterly benchmark of September 15.
Businesses such as S corporations and calendar year partnerships that had ’20 extensions set to expire on September 15 or an extension set to expire on October 15 will be provided with the opportunity to file in January as detailed above.
Taxpayers who live in federally declared disaster areas affected by these two historic storms are empowered to claim casualty losses related to the disaster on the federal income tax return for this current year or the prior year. Additional details are included on the IRS Publication 547 notice. Individuals can deduct causally related personal property losses that lack coverage through insurance or reimbursements.
Taxpayers who decide to claim the disaster loss on the 2020 return are encouraged to write “New York – Hurricane Ida” in bold letters at the form’s top. Furthermore, the IRS is also encouraging such taxpayers to add “DR-4615” on tax returns. This series of letters and numbers is the FEMA disaster declaration number.
Has Your Business Been Affected by Hurricane Ida? Document the Damage
If you own or manage a small-to-midsize business that was negatively impacted by Hurricane Ida, don’t assume you have to emerge from this financial hole by pulling up on your own metaphorical bootstraps.
Uncle Sam is here to lend assistance during this challenging time. However, you will need to submit some documentation to obtain that assistance.
Business owners affected by Hurricane Ida are encouraged to take pictures and obtain additional documentation of damage stemming from the storm. Fail to document the damage to your business and it might not prove eligible for federal and state relief. The specific amount of financial relief for small-to-medium size businesses has yet to be determined. However, it is in your interest to document the entirety of the damage in the aftermath of the storm to maximize your financial relief moving forward. Business owners in Louisiana, New Jersey, New York and other states affected by the storm are encouraged to file a business insurance claim if they have a private insurance policy applicable to the storm.
Does Your Small Business Qualify for the Business Assistance Grant Program?
There is also a Business Assistance Grant Program available to businesses affected by Hurricanes Ida and Henri. This program provides prompt yet brief financial assistance for August rent or mortgage reimbursement support to New Jersey-area small-to-medium-sized companies as well as non-profits. However, it must be proven that those entities endured physical damage after Hurricane Henri or Ida passed through.
New Jersey businesses and nonprofits with upwards of 50 employees or less that suffered a minimum $1,000 of damage from Hurricane Ida or Henri qualify. The August ’21 mortgage or rent reimbursement tops out at $5,000.