IRS Provides Tax Relief for Victims of Hurricane Ida
Business Law Articles
Gordon Arata Montgomery Barnett
New Orleans, Louisiana
NEW ORLEANS, LOUISIANA—September 2021—Gordon Arata Partner Caroline Lafourcade has provided the following interpretation of Internal Revenue Service publication IR-2021-175 providing guidance on tax relief to Hurricane Ida’s victims:
IRS Provides Tax Relief for Victims of Hurricane Ida
The Internal Revenue Service announced today that victims of Hurricane Ida now have until January 3, 2022, to file various individual and business tax returns and make tax payments.
IR-2021-175 states that the Service is granting tax relief to Ida’s victims – in any area designated as qualifying by the Federal Emergency Management Agency (FEMA). These areas currently include the entire State of Louisiana as well as many parts of the State of Mississippi.
The relief is provided for filing and payment deadlines occurring on or after August 26, 2021.
Those individuals and businesses who filed extensions for their 2020 tax returns will now have until January 3, 2022, to file their 2020 returns.
Quarterly estimated income tax payments due on September 15, 2021, have also been granted an extension until January 3, 2022, as have quarterly payroll and excise tax returns which would have fallen due on November 1, 2021.
Penalties on payroll and excise tax deposits due between August 26, 2021, and September 10, 2021, will be abated if deposits are made by September 10, 2021.
Further, both individuals and businesses in the federally declared disaster areas can choose to claim uninsured and/or unreimbursed losses as a result of Hurricane Ida either on their 2021 income tax returns or on their 2020 returns (via filing an amended tax return if their 2020 tax return was filed previously). Any return claiming such losses should include FEMA declaration number 4611 to identify Hurricane Ida-related losses.
Because income tax payments related to 2020 individual income tax returns were due on May 17, 2021, those payments are not eligible for this relief. Thus, the Ida extension applies only with respect to the filing deadline on a 2020 return that is on extension, and not to payment of any 2020 income tax that might be due.
As individuals and businesses respond to and begin the process of recovering from Hurricane IDA, the following items should be considered:
- The availability of insurance coverage for living expenses due to mandatory evacuation;
- How to deal with uninsured/unreimbursed casualty losses;
- Calculating business loss of income;
- Substantiating business loss claims and coverage; and
- The availability of 401(k) loans and distributions not subject to penalties.
Gordon Arata Montgomery Barnett’s tax team is safely evacuated, and open for business. Contact Caroline D. Lafourcade at (504) 251-2441, or clafourcade@gamb.com with any questions or for assistance.
About Gordon Arata
Gordon Arata, with offices strategically located in Louisiana, continues to evolve to meet the demands of its clients across the Gulf Coast and beyond. The firm represents savvy clients across a wide array of practice areas and industries, including energy, construction, finance, banking, real estate, tax, employment, bankruptcy and creditors rights, chemical, manufacturing, maritime, telecommunications and public utilities. The firm is a member of Primerus, an International Society of Law Firms.
FOR IMMEDIATE RELEASE
Contact: Caroline Lafourcade
(504) 251-2441
clafourcade@gamb.com