On September 19, 2017, the Internal Revenue Service extended disaster relief for taxpayers affected by Hurricane Irma to all 159 counties in the state of Georgia. The announcement was issued shortly after the President declared a state of emergency in Georgia and authorized federal relief efforts. The relief provided by the IRS extends the due date for certain income tax returns and estimated tax payments due on or after September 7, 2017, until January 31, 2018. The Georgia Department of Revenue issued an identical announcement extending the deadline for certain state tax filings and payments for hurricane victims until January 31, 2018.
Who is Eligible:
The Hurricane Irma tax relief applies to both individuals and businesses. An individual is eligible for relief if he or she meets any one of the following requirements:
1. Primary home is located in Georgia
2. Served as a relief worker affiliated with a recognized government or philanthropic organization assisting in Georgia
3. Books and records are maintained or located in Georgia
4. Suffered death or injury as a result of the hurricane
5. Is married to an individual meeting any of items (1) – (4) and files a joint return with that individual
A business, such as a partnership, corporation or sole proprietorship, is eligible for this relief if any one of the following applies:
1. Principal place of business is located in Georgia
2. Books and records are maintained or located in Georgia
Similar relief was previously granted to victims of Hurricane Irma throughout Florida and in certain parts of the Virgin Islands and Puerto Rico, as well as to victims of Hurricane Harvey in certain parts of Texas. Individuals and businesses in these areas are also eligible for relief if they meet one of the above requirements.
Affected Returns and Payments:
Most individual and business tax filings and payments that had an original or extended due date on or before September 7, 2017, are eligible for postponement until the new January 31, 2018 deadline. This includes federal and state income tax returns for individuals, partnership, S corporations, C corporations and fiduciaries; transfer tax returns including estate, gift and generation-skipping transfer taxes; as well as informational returns for tax-exempt organizations and employment/excise/sales tax returns. Federal and state of Georgia estimated tax payments due after September 7, 2017 are also eligible for postponement until January 31, 2018.
The most notable tax filing deadlines that have been postponed are listed below (only applicable if an extension was properly filed):
• Form 1120S and GA 600S for calendar-year S corporations (extended due date of 9/15/17)
• Form 1120 and GA 600 for calendar-year C corporations (extended due date of 9/15/17)
• Form 1065 and GA 700 for calendar-year partnerships (extended due date of 9/15/17)
• Form 1041 and GA 501 for calendar-year trusts and estates (extended due date of 10/02/17)
• Form 1040 and GA 500 for individuals (extended due date of 10/16/17)
• Forms 990, 990-PF and 990-EZ for tax exempt organizations (extended due date of 11/15/17)
The most notable tax payment deadlines that have been postponed are listed below:
• Federal and Georgia third-quarter estimated income taxes (due date of 9/15/17)
• Federal and Georgia fourth-quarter estimated income taxes (due date of 1/16/18)
Note that tax payments related to 2016 tax returns are not eligible for relief, because these payments were originally due on April 18, 2017.
In addition to the postponement of filing and payment deadlines, other tax-related relief is available to individuals and businesses affected by the hurricane. Individuals have expanded access to hardship distributions and plan loans from qualified retirement plans until January 31, 2018. Hardship distributions can be made for any hardship experienced due to the hurricane, not just those specified in the plan documents, and there are no restrictions on subsequent contributions to the plan. Plan loans can be made without having to provide the usual documentation, as long as the plan administrator makes a reasonable attempt to obtain the documentation as soon as is practical.
Individuals and businesses are also eligible for more flexible rules with regards to the claiming of casualty losses. If a taxpayer experiences a property loss (such as a damaged roof or office space), and the loss exceeds any insurance reimbursement, the excess can be deducted as a loss on their individual or business income tax return, subject to certain limitations. The special relief provided to hurricane victims allows them to claim the deduction either on the prior year’s tax return or for the year that the loss actually occurred. For example, an individual could deduct a loss occurring due to the hurricane in September 2017 on a 2016 tax return filed immediately thereafter. The IRS is also expediting refunds issued due to such losses.
If you have any questions regarding how the hurricane tax relief affects you, please contact your Bennett Thrasher tax representative or call 770.396.2200.