September 14, 2021
IRS extends tax filing and payment deadlines until January 3, 2022, for individuals and businesses, including tax-exempt organizations, affected by Hurricane Ida
The IRS announced that victims of Hurricane Ida in parts of New York and New Jersey (IR-2021-179) and Pennsylvania (IR-2021-183) will have until January 3, 2022, to file various individual and business tax returns and pay the associated tax. The IRS had granted similar relief to Ida victims in Louisiana, Mississippi and neighboring states.1
As of September 1, 2021, the tax relief extends until January 3, 2022, the following tax filing and payment deadlines of certain “affected taxpayers” (defined below):
In addition, penalties on payroll and excise tax deposits due on or after September 1, 2021, and before September 16, 2021, will be abated if the deposits are made by September 16, 2021.
This relief will automatically be granted to “affected taxpayers,” defined as those with an IRS address of record in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for assistance. As of September 10, 2021, qualifying areas in New York include Bronx, Kings, Nassau, New York, Queens, Richmond and Westchester counties, and in New Jersey include Bergen, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Passaic, Somerset and Union counties. If an area is subsequently designated by FEMA as eligible for disaster relief, residents will automatically receive the same filing and payment relief.
Taxpayers who live or have a place of business outside the declared disaster area, but whose tax records (or return preparer) are located within the affected area may qualify for relief by calling the IRS at 866-562-5227.
The IRS has stated that taxpayers who receive a notice for a filing, payment or deposit affected by the postponement period can call the IRS to have the penalty abated.
This relief is welcome news to many taxpayers, including private and alternative funds and their investors, that are located in New York and New Jersey and were affected by Hurricane Ida, or otherwise qualify as an “affected taxpayer” eligible for relief (e.g., because their tax provider is located in a FEMA-designated disaster area and is unable to file or pay on their behalf, or because they are a partner in a partnership that is an affected taxpayer).
Following the IRS’s lead, New Jersey provided payment and filing relief to certain affected taxpayers. Thus, some taxpayers may opt to file their tax returns on or before the pre-relief deadlines, as state and local returns generally start with what is reported on taxpayers’ federal returns. Even if taxpayers do not take advantage of the federal filing deadline relief, they may choose to defer the payment of their federal tax liabilities under the relief deadlines.
Prior to deferring a federal filing or payment obligation, taxpayers should consult Treas. Reg. Section 301.7508A-1(c)(1) and Rev. Proc. 2018-58 to verify that the action being deferred qualifies for relief (the postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; Forms 1042-S, 3921, 3922 or 8027; or to employment and excise tax deposits).
Pension trusts that file Federal Form 990-T to report unrelated business income from investment partnerships may also be affected by this relief. These trusts may need to seek tax information directly from partnerships that are now able to extend their own filing deadlines to the same extended due date as the pension trusts. Thus, trusts may be required to seek pro-forma tax information to prepare the return.
1 See the IRS website for state-specific relief information.