The Internal Revenue Service (IRS) offers administrative tax relief in various forms to victims living in areas that the Federal Emergency Management Agency (FEMA) or the White House has declared a major disaster area. In August, the IRS extended relief to those affected by Tropical Storm Debby and in September to those affected by Hurricane Helene. An IRS announcement dated October 11, 2024, states that the agency is extending administrative tax relief to those affected by Hurricane Milton, which includes individuals living or owning a business in 78% of Florida counties. However, affected taxpayers who reside or have a business outside the covered disaster area should call the IRS disaster hotline at (866) 562-5227 to request this tax relief.
Disaster / Hardship Retirement Distributions
This administrative tax relief allows affected individuals to take a special disaster distribution from their retirement plans or IRAs without incurring the 10% early distribution tax. Taxpayers can spread the distribution over three years.
Those who wish to take a special disaster distribution must be mindful of the following guidelines:
- Each retirement plan or IRA has specific rules and procedures that individuals must follow to take a disaster distribution.
- A disaster or hardship distribution cannot exceed the amount of the individual’s financial need, but it can include the funds necessary to pay any taxes and penalties.
- The IRS does not consider a disaster distribution necessary if individuals have other resources available to meet their financial needs.
Filing Deadline Extensions
Affected taxpayers throughout Florida now have through May 1, 2025, to file various individual and business tax returns. They also have until this date to make tax payments that normally would have been due after October 11, 2024, and before May 1, 2025. More specifically, this filing deadline extension applies to the following:
- Any individual or business that has a 2024 return normally due during March or April 2025;
- Any individual, C corporation, or tax-exempt organization with a valid extension to file their calendar year 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the hurricane occurred;
- 2024 quarterly estimated tax payments normally due on Jan. 15, 2025, and 2025 estimated tax payments normally due on April 15, 2025; and
- Quarterly payroll and excise tax returns normally due on Oct. 31, 2024, Jan. 31, 2025, and April 30, 2025.
Temporary Abatement of Penalties on Payroll and Excise Tax Deposits
The IRS will also abate payroll penalties and excise tax deposits due on or after October 11, 2024, and before October 21, 2024. To qualify for this relief, entities must make the required tax deposits by October 21, 2024, and be in one of the affected Florida counties, as listed in the IRS announcement.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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