Calvetti Ferguson

Tax Relief Granted to Flood Victims in Texas

-Theresa Riedmann, CPA

Update – The following Texas counties have been added to the list announced previously: Austin, Colorado, Walker, Wharton, Fort Bend, Liberty, Montgomery, and San Jacinto. The taxpayers residing in all of the affected counties will be granted relief under IRS Code §7508A.

On April 25, 2016, President Obama issued a disaster declaration for Texas. The Federal Emergency Management Agency (FEMA) announced that relief would be provided for the Texas counties of Harris, Fayette, Grimes, and Parker due to flooding occurring from April 17, 2016 to April 24, 2016.

Due to the FEMA declaration, the IRS has issued a statement that Texas storm victims will have until September 1, 2016 to file their returns and pay any taxes due. The tax relief provided by this announcement applies to income tax returns normally due April 18, quarterly estimated tax payments due June 15, quarterly payroll returns due May 2 and August 1, and quarterly excise tax returns due May 2 and August 1. Additionally, the IRS will waive penalties on late deposits for the federal payroll and excise tax deposits normally due on or after April 17, 2016 and May 2, 2016 provided the deposits are made by May 2, 2016.

This tax relief will be granted automatically to any taxpayer with an IRS address of record located in the disaster area. Those taxpayers that do not reside in the disaster area, but have records located within the disaster area that are necessary to meet the deadline will need to contact the IRS in order to get this tax relief.

Additionally, individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either 1) the return for the year the loss occurred (tax year 2016) or 2) an original or amended return for the prior year (tax year 2015).

Please contact any of the Calvetti Ferguson tax partners or managers if you have questions in regards to this tax relief.