This report covers tax relief announced by the U.S. IRS for victims of Hurricane Harvey in south Texas.
On August 28, 2017, the U.S. Internal Revenue Service (IRS) announced that Hurricane Harvey victims in parts of Texas have until January 31, 2018, to file certain individual and business tax returns and make certain payments.1 The tax relief postpones various tax filing and payment deadlines that occurred starting on August 23, 2017.
Individuals who have been granted an extension of time to file have an obligation to file their U.S. federal income tax returns by October 16, 2017, and some may have quarterly estimated tax payments coming due. In addition, certain tax-related deadlines for businesses are fast approaching. Relief from these obligations is welcome as affected individuals and businesses begin the slow process of recovering from the destruction caused by the severe storms and flooding.
The due date for individuals to file and pay their U.S. federal income taxes is April 15. However, taxpayers may request an extension of time to file individual income tax returns until October 15. The extension of time to file does not apply to the payment of tax due. Interest is charged on tax payments made after April 15 and late payment penalties may be assessed.
Under the recently announced relief, affected individuals who received a tax-filing extension until October 16, 2017, will have until January 31, 2018 to file their 2016 federal income tax returns. However, tax payments related to the 2016 tax returns that were originally due on April 18, 2017, are not eligible for this relief.
The deadline for making quarterly estimated tax payments originally due on September 15, 2017 and January 16, 2018, is extended to January 31, 2018.
In addition, taxpayers who suffer uninsured or unreimbursed disaster-related losses can choose to claim them on either the tax return for the year in which the loss occurred (in this case, 2017), or the return for the prior year (2016), which would have the effect of accelerating the financial relief associated with the claim for the loss.2
A number of business tax deadlines are also affected including the October 31 deadline for quarterly payroll and excise tax returns. The IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after August 23 and before September 7 if the deposits are made by September 7, 2017. Similar to individual taxpayers, the deadline for quarterly estimated payments due on September 15, 2017 and January 16, 2018, is extended to January 31, 2018.
The IRS automatically provides filing and penalty relief to taxpayers with an IRS address of record located in the disaster area. Currently, individuals and businesses in the following Texas counties are eligible for relief: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria, and Wharton. Any locations added to the list at a later date will automatically receive filing and payment relief.3
The information contained in this newsletter was submitted by the KPMG International member firm in the United States.
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.