Recently, in separate notices, the IRS announced tax relief for taxpayers impacted by the recent winter storm that caused flooding in the Midwest. On March 22, the IRS published notice NE-2019-02, providing tax relief for regions of Nebraska impacted by the recent winter storm. Currently, the relief for regions in Nebraska is limited to Butler, Cass, Colfax, Dodge, Douglas, Nemaha, Sarpy, Saunders and Washington counties. On March 25, 2019, the IRS issued notice IA-2019-02, providing relief for Fremont, Harrison, Mills, Monona and Woodbury counties in Iowa.
Like tax relief for other major disasters, these provisions also extend to taxpayers not located within the declared disaster area, but whose records necessary to meet a tax filing deadline are located within the impacted declared areas. Additionally, impacted taxpayers include workers assisting with the relief efforts who are affiliated with a recognized government or philanthropic organization. All qualifying taxpayers with an address outside of the impacted areas must contact the IRS at 866-562-5227.
Grant of relief
The tax relief postpones various tax filing and payment deadlines due on or after March 9, 2019 and before July 31, 2019 for Nebraska locations and deadlines on or after March 12, 2019 and before July 31, 2019 for Iowa locations. As a result, affected individuals and businesses have until July 31, 2019 to file returns and pay any taxes that were originally due during this period. That includes upcoming tax year 2018 filings for calendar year taxpayers due on March 15, 2019 and April 15, 2019 as well as deadlines for making quarterly estimated tax payments. Specifically for impacted individual tax filers, the relief applies to their 2018 income tax returns that are otherwise due April 15, 2019. The relief also applies to tax-exempt organizations operating on a calendar-year basis that have a Form 990 due on May 15, 2019.
In affected Nebraska counties, the IRS will waive any late-deposit penalties for federal payroll and excise tax deposits normally due on or after March 9, 2019, and before March 25, 2019, if the deposits are made by March 25, 2019. In affected Iowa counties, the IRS will waive any late-deposit penalties for federal payroll and excise tax deposits normally due on or after March 12, 2019, and before March 27, 2019, if the deposits are made by March 27, 2019
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
These declarations also trigger special provisions that give affected taxpayers the option of claiming disaster-related casualty losses on their federal income tax return either in the year the event occurred or in the preceding tax year. While personal casualty losses are no longer deductible beginning with the 2018 tax year as a result of tax reform, personal casualty losses attributable to a federally declared disaster may be claimed as a qualified disaster loss. See Publication 547 for details.