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East County News Service
Photo: CC by SA via Bing
February 28, 2024 (San Diego) -- The Internal Revenue Service has announced tax relief for individuals and businesses in areas with disaster declarations designated by Federal Emergency Management Agency (FEMA). This includes San Diego County residents and businesses impacted by the severe storms and flooding that began January 21st.
Congresswoman Sara Jacobs announced she is “grateful that the IRS answered my call for tax relief for San Diegans.”
These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.
These include individual income tax returns, IRA and health savings account contributions, quarterly payroll and excise tax returns, as well as tax returns for corporations and nonprofits.
Also, penalties for failing to make payroll and excise tax deposits due on or after January 21st and before Feb. 5th will be abated as long as the deposits were made by Feb. 5th.
The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.
The IRS automatically provides 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.
It is possible an affected taxpayer may not have an IRS address of record in the disaster area, for example, if they moved to the disaster area after filing their last return. If you receive a notice of a penalty, you should call the number on the notice to have the penalty abated.
In addition, the IRS will 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.
Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Reminder about extensions
The IRS urges anyone who needs an additional tax-filing extension, beyond June 17 for their 2023 federal income tax return to request it electronically by April 15. Visit IRS.gov/extensions for details.
Additional tax relief
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.
Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income any money received from a government agency for reasonable and necessary living expenses, costs to repair their home, or to replace damaged contents of their home.
Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement. or IRA. For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years.
Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.
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 these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit DisasterAssistance.gov.
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