NY and NJ Victims of Hurricane Ida May Be Eligible for IRS Disaster Relief

As you may have already heard, on Wednesday, September 8, 2021, the Internal Revenue Service (IRS) released guidance allowing individuals and businesses that were victims of Hurricane Ida in parts of New York and New Jersey to file returns and pay certain taxes up to January 3, 2022. The extension applies to tax filings and payments that were due starting on September 1, 2021.

The relief currently applies to taxpayers in any areas that the Federal Emergency Management Agency (FEMA) designates as qualifying for individual or public assistance. That list currently includes the following counties in New York State: New York (Manhattan), Kings (Brooklyn), the Bronx, Queens, Richmond (Staten Island) and Westchester; as well as Bergen, Gloucester, Hunterdon, Middlesex, Passaic and Somerset counties in New Jersey. FEMA may expand this list in the future.

The IRS will automatically provide relief to taxpayers that have an IRS address on record in one of the affected counties. No action has to be taken by affected taxpayers related to their returns. The IRS also notes that taxpayers that are located outside of the designated areas can call 866-562-5227 to request relief. Given recent IRS responsiveness issues, we suggest that this approach only be taken as a last resort.

The IRS provided examples of how this relief may work. For instance, if an individual’s extended 2020 tax return is normally due October 15th, the new extended due date for an affected taxpayer will be January 3, 2022. The extension does not cover any additional tax due with that return since such tax was due back in May of 2021. Therefore, penalties and interest will continue to apply on any underpayments.

Similar extension relief is also available for business returns with due dates on or after September 1, 2021. In addition, if an affected business or individual taxpayer has a third quarter estimated payment due September 15, 2021, that payment is now due January 3, 2022.

The IRS release also mentions relief for other types of taxes including payroll and excise taxes as well as relief for calendar year tax exempt organizations with an extended return due date of November 15, 2021.

Additionally, on September 9, 2021, the State of New Jersey announced that it is following the recently released federal guidance. As of the writing of this alert, the State of New York has not made any such announcement.

If you have any questions about how this may affect you or your business, please contact your Anchin Relationship Partner.