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IRS Announces Tax Relief for Taxpayers Affected by Severe Storms, Straight-Line Winds, Tornadoes and Flooding in Mississippi

Storm damage to the furnace

WASHINGTON – The Internal Revenue Service today announced tax relief for Mississippi individuals and businesses affected by severe storms, straight-line winds, tornadoes and flooding that began on April 8, 2024. These taxpayers now have until November 1, 2024, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration by the Federal Emergency Management Agency (FEMA), individuals and households residing or having a place of business in Hancock, Hinds, Humphreys, Madison, Neshoba and Scott counties are eligible for tax relief.

The declaration allows the IRS to delay certain tax filing and tax payment deadlines for taxpayers who reside or operate a business in the disaster area. For example, for certain deadlines that fall on or after April 8, 2024, and before November 1, 2024, additional time to file is granted until November 1, 2024. As a result, affected individuals and businesses will have until November 1, 2024 to file tax returns and pay any taxes that were originally due during that period.

The November 1, 2024 deadline applies to individual income tax returns and payments normally due on April 15, 2024. This deadline also applies to all payments normally due during this period, including the quarterly estimated tax payment due on April 15, 2024, June 17, 2024, and September 16, 2024, and the quarterly payroll and excise tax returns normally due on April 30, 2024, July 31, 2024, and October 31, 2024.

In addition, penalties on payroll and excise tax deposits due on or after April 8, 2024, and before April 23, 2024, will be waived, provided the tax deposits were made by April 23, 2024. In addition, the November 1, 2024 deadline also applies to contributions to IRAs and health savings accounts for eligible taxpayers in 2023, corporate and trust returns and payments for the calendar year that are normally due April 15, 2024, and tax-exempt organizations’ returns for the calendar year that are normally due May 15, 2024.

If an affected taxpayer receives a late filing or late payment notice from the IRS with a penalty for which the original filing, payment or deposit date falls within the forbearance period, the taxpayer should call the telephone number provided on the notice and request a penalty reduction from the IRS.

The IRS will automatically identify taxpayers located in the affected disaster area and provide tax relief for filing and payment. However, affected taxpayers who reside or have a business outside the affected disaster area should call the IRS Disaster Hotline at 866-562-5227 to request this tax relief. Tax preparers in disaster areas with clients outside the disaster area may use the “Bulk Requests from Practitioners for Disaster Assistance” option described on IRS.gov.

Covered disaster area

The locations listed above constitute a covered disaster area under Treas. Reg. §301.7508A-1(d)(2) and are eligible for the assistance listed below.

Affected taxpayers

Affected taxpayers eligible for an extension to file tax returns, pay taxes, and take other time-sensitive actions are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1). These include individuals residing in the disaster area and businesses (including tax-exempt organizations) with a principal place of business in the area. Taxpayers who are not in the disaster area but who have documentation in the disaster area necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are also eligible for assistance. In addition, all relief workers affiliated with a recognized governmental or philanthropic organization assisting with relief efforts in the disaster area and all persons visiting the disaster area who are killed or injured as a result of the disaster are also eligible for assistance.

Under Section 7508A, the IRS grants affected taxpayers until November 1, 2024, to file most tax returns (including income tax returns for individuals, corporations, estates, and trusts; returns for partnerships, S corporations, and trusts; returns for estate, gift, and generation-transfer taxes; annual returns of tax-exempt organizations; and returns for employment and certain excise taxes) that have an original or extended due date on or after April 8, 2024, and before November 1, 2024. These returns will be filed by November 1, 2024.

Affected taxpayers whose prepayment of income tax was originally due on or after April 8, 2024 and whose due date was postponed to November 1, 2024, will not have to pay penalties for non-payment of prepayment installments as long as those payments are made on or before November 1, 2024.

The IRS is also providing affected taxpayers until November 1, 2024, to complete other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2018-58, 2018-50 IRB 990 (December 10, 2018), which must be completed on or after April 8, 2024, and before November 1, 2024. Additional time is provided until November 1, 2024 to file tax returns.

This relief also includes the filing of Form 5500 returns that were due to be filed on or after April 8, 2024, and that were required to be filed before November 1, 2024. This deadline is postponed to November 1, 2024, in the manner described in section 8 of Rev. Proc. 2018-58. The relief with respect to like-kind exchanges of property described in section 17 of Rev. Proc. 2018-58 also applies to certain taxpayers who are not otherwise affected taxpayers and may include actions that must be taken before or after the above-mentioned period.

Unless specifically listed by law in Rev. Proc. 2018-58, the postponement of the filing and payment deadline does not apply to Series W-2, 1094, 1095, 1097, 1098, or 1099 tax returns; to Forms 1042-S, 3921, 3922, or 8027; or to payroll and excise tax deposits. However, penalties for deposits due on or after April 8, 2024, and before April 23, 2024, will be waived provided the tax deposits are made by April 23, 2024.

losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related personal injury losses on their federal income tax return for either the year of the event or the previous year, in this case the 2024 tax return (which is usually filed next year) or the previous year’s tax return (the 2023 tax return, which is filed this year). Taxpayers have more time—up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (not counting any extension to file)—to make the election. See Publication 547 for details. Individuals can deduct personal property losses not covered by insurance or other reimbursements. See Form 4684, Accidents and Thefts, and its instructions for details. Affected taxpayers claiming the disaster losses on their tax return should include FEMA’s disaster declaration number 4790-DR on each return. For details, see Publication 547.

Other relief

The IRS is waiving the usual fees and requiring copies of previously filed tax returns for affected taxpayers. Taxpayers should provide the assigned FEMA return number. (4790-DR)in bold letters at the top of Form 4506 (Request for a Copy of Tax Return) or Form 4506-T (Request for a Transcript of Tax Return) and file it with the IRS.

Qualified disaster relief payments are generally excluded from gross income. This means that affected taxpayers can exclude from their gross income amounts they receive from a government agency for reasonable and necessary personal, family, living, or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. For more details, see Publication 525.

Affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA) may be able to receive additional relief. For example, a taxpayer may be eligible for a special disaster distribution that is not subject to the additional 10% tax on early distributions and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible for a hardship distribution. Each plan or IRA has specific rules and guidelines that participants must follow.

The IRS may provide additional disaster assistance in the future.

Affected taxpayers contacted by the IRS in a collection or audit matter should explain how the disaster affects them so that the IRS can properly review their case. Taxpayers can download forms and publications from the official IRS website, IRS.gov.

Reminder of options for preparing your tax return

  • MilTax, a program of the U.S. Department of Defense, provides free software for tax preparation and electronic filing of federal tax returns and up to three state income tax returns. It is available to all military members and some veterans, with no income limit.

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