Hurricane Sandy Tax Relief

Post Date: 11/19/12
Last Updated: 11/19/12

Summary

Cross References
• www.irs.gov

The IRS has announced a number of provisions designed to help victims of Hurricane Sandy. The following is a summer of tax relief provisions.
• Taxpayers and tax preparers affected by Hurricane Sandy have until February 1, 2013 to file returns and pay taxes that were due in late October 2012. Examples include payroll and excise tax returns that were normally due on October 31, 2012.
• IRS is waiving failure to deposit penalties for federal payroll and excise tax deposits normally due on or after the disaster area start date and before November 26, 2012, if the deposits are made by November 26, 2012.
• Because Hurricane Sandy is designated as a qualified disaster for federal tax purposes, qualified disaster relief payments made to individuals by their employer or any person can be excluded from taxable income.
• Employer-sponsored private foundations may provide disaster relief to employee-victims in areas affected by the hurricane without affecting their tax-exempt status.
• IRS will not impose a tax penalty when dyed diesel fuel is sold for use or used on the highway in New Jersey, New York, and Pennsylvania.
• IRS will waive Low-Income Housing Credit rules that prohibit owners of low-income housing from providing housing to victims of Hurricane Sandy who do not qualify as low-income.
• IRS announced an expedited review and approval process for organizations seeking tax-exempt status in order to provide relief for victims of Hurricane Sandy. The IRS anticipates new charities will form to address specific needs of disaster victims.
• Employees can forgo leave in exchange for employer cash payments made before January 1, 2014 to qualified charities without having to include the amounts in the employee’s taxable wages. The employer gets a tax deduction for a business expense rather than as a charitable contribution.
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