IRS postpones various tax filing and tax payment deadlines for Hawaii fire victims. Affected taxpayers in Maui County and Hawaii county will have until Aug. 7, 2024 to file returns and pay any taxes that were originally due during Aug. 8, 2023, through Aug. 7, 2024 period.
The IRS issued guidance granting relief to taxpayers affected by wildfires in Hawaii (HI) that began on Aug. 8, 2023. Previously the deadline was Feb. 15, 2024, which has been further postponed until Aug. 7, 2024. Taxpayers now have until Aug. 7, 2024, to file various individual and business tax returns and make tax payments. Individuals residing in and businesses with an address in Maui and Hawaii counties qualify for relief. The relief postpones various tax filing and payment deadlines that were originally due on or after Aug. 8, 2023, and before Aug. 7, 2024. This includes taxpayers with valid extensions to file their 2022 tax returns that ran out on Sep. 15, 2023 and Oct.16, 2023. The relief does not include payments related to these 2022 returns because those payments were due on April 18, 2023.
The Aug. 7, 2024, due date also applies to 2023 individual income tax returns and payments normally due on April 15, 2024, 2023 contributions to IRAs and health savings accounts for eligible taxpayers, quarterly estimated income tax payments normally due on Sep. 15, 2023, Jan. 16, 2024, April 15, 2024 and June 17, 2024, and the quarterly payroll and excise tax returns normally due Oct. 31, 2023, Jan. 31, 2024, April 30, 2024, and July 31, 2024. The relief also applies to 2023 calendar-year partnerships and S corporation returns normally due on March 15, 2024, as well as calendar-year corporation and fiduciary returns and payments normally due April 15, 2024. This also includes tax-exempt organization returns normally due on May 15, 2024.
The IRS highly recommends anyone who needs an additional tax-filing extension, beyond Aug. 7, 2024, for their 2023 federal income tax return to request it electronically by April 15, 2024. Although a disaster-area taxpayer can request an extension between April 15 and Aug. 7, 2024, the extension can only be submitted on paper after April 15, 2024.
In addition to extensions of time to file tax returns and complete certain actions, presidential disaster declarations offer taxpayers special options with respect to gain/loss recognition. Taxpayers who experience a casualty loss in a presidentially-declared disaster area may qualify to recognize losses in the year prior to the year the casualty actually occurred under section 165(i). Taxpayers who realize gains by receiving insurance proceeds in excess of basis may be able to defer gain recognition by reinvesting in qualified property under section 1033. Some of these actions are time sensitive, so taxpayers are encouraged to contact their tax advisor to take advantage of the full range of relief options. Taxpayers that will claim a disaster loss should note “Disaster Designation – Hawaii Wildfires” in bold letters at the top of their return and also include the FEMA disaster declaration number. For the Aug. 8, 2023 wildfires in Hawaii, the designation is DR-4724-HI.
Please see the applicable news release and refer to Publication 547 and Instructions to Form 4684 Casualties and Thefts for instructions.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extending filing, payment or deposit due date falling within the postponement period, the taxpayer or their representative should contact the IRS to have the penalty abated.
The IRS will also work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Qualified disaster relief payments are generally excluded from gross income. This means that affected taxpayers can exclude from their gross income amounts received 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. See Publication 525 for details.
Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.
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