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IRS offers filing relief for hurricane victims

The IRS announced tax relief programs for victims of Hurricanes Harvey and Irma, extending deadlines for filing taxes and exemptions.

A statement by the IRS was released reminding calendar-year partnerships that the due date for filing a return after receiving an extension remained September 15 following a recent change in tax law. However, deadlines have been postponed and extended.

For deadlines falling on or after September 6, 2017 and before January 31, 2018, taxpayers will have extra time through January 31, 2018 to file certain tax returns and make tax payments, including estimated payments. This relief covers individual, corporate, estate and trust income tax returns, and partnership returns. The program includes taxpayers that have either an original or extended due date occurring on September 15 or October 15, and applies to payroll and certain excise tax returns which were originally due on October 31.

In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due during the first 15 days of the disaster period.

The IRS is providing tax filing relief to any area designated by the Federal Emergency Management Agency (FEMA) that qualifies for assistance. The current list of eligible localities is available here.

While the agency will automatically apply relief to those in the disaster zone, affected taxpayers who live outside the disaster area should call to see if they qualify. The IRS Disaster Hotline number is 866.562.5227.

Retirement plan loans and distributions

The IRS is allowing individuals to make loans and hardship distributions to hurricane victims through their employer-sponsored retirement plans on more relaxed terms. Although IRA participants are prohibited from taking out loans, they may be eligible to receive distributions under liberalized procedures. Note that the IRS is not waiving the 10 percent penalty that applies to early withdrawals.

The IRS is abating certain rules that generally apply to retirement plan loans and hardship distributions so that participants can access their money more quickly.

Individuals who live outside the disaster area can also take out a retirement plan loan or hardship distribution to assist family or other dependents in the affected area.

To qualify for this relief, hardship withdrawals or loans must be made by January 31, 2018.

Employee plans

In response to the hurricanes, the Employee Benefit Security Administration is temporarily waiving certain deadlines and requirements. For sponsors of single-employer defined benefit plans, that is an opportunity for relief from minimum funding requirements. Employers who have retirement plan contributions due by the due dates of tax returns, including extensions, will see those extended due dates for their plan contributions pushed out to the January 31, 2018 extension deadline.

If you have questions or would like additional information, please visit IRS.gov or contact your Rehmann advisor today.

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