Disaster Area Tax Relief Does Not Extend to ACA Reporting

benjamin-kerensa-363991 (1)The IRS has announced tax deadline extensions to individuals and businesses affected by the Thomas fire and subsequent flooding, mud and debris flow in Santa Barbara and Ventura counties.  The same relief is extended to individuals and businesses in San Diego and Los Angeles counties affected by wildfires and related natural disasters occurring since December 4, 2017, and is triggered by President Trump’s disaster declaration for these areas.  Significantly for “Applicable Large Employers” as defined by the ACA, the relief does not extend to Forms 1094-C and 1095-C, which are due in the early months of 2018, as discussed in our earlier post.  Certain other benefit-related filing guidance is discussed below.

Who is Eligible for the Relief?

The relief extends to “Affected Taxpayers,” meaning:

  • Individuals who reside in the affected counties.
  • Businesses – including nonprofits – with a principal place of business in the affected counties.
  • Taxpayers located outside the affected counties who stored records in the affected counties that are necessary to fulfill filing deadlines.
  • Governmental or charitable aid workers who assisted in the disaster areas.
  • Any visitor to the disaster areas who was killed or injured as a result of the disaster.

What Relief is Available?

Affected Taxpayers may claim the following relief:

  • An extension, to April 30, 2018, to file most tax returns with an original or extended due date falling between December 4, 2017 and April 30, 2018 (hereafter, the “affected period”), including:
    • Individual, corporate, estate and trust income tax returns;
    • Partnership returns, S corporation returns, trust returns;
    • Estate, gift, and generation-skipping transfer tax returns;
    • Employment and certain excise tax returns;
    • Annual information returns of tax exempt organizations (Form 990s);
    • Certain excise tax returns.
  • With respect to annual return/reports for retirement and certain health and welfare plans (Form 5500 series), the April 30, 2018 extended deadline is available only to Affected Taxpayers who are unable to obtain from a bank, insurance company, or any other service provider, on a timely basis, information necessary for completing the forms, because the service provider’s operations are located in a covered disaster area. In these limited circumstances, both the Department of Labor and the PBGC will recognize the same deadline extension.

In a separate announcement, the PBGC is extending certain deadlines and waiving penalties for plan administrators affected by the California wildfires and ensuing natural disasters.

What is NOT Eligible for the Relief?

The relief does not extend to:

  • Deadlines to file and furnish Forms W-2;
  • Deadlines applicable to ACA Forms 1094-C (Transmittal Form) and 1095-C (Employee Statements) for 2017, required to be filed and furnished by Applicable Large Employers. Those deadlines remain as follows: File Form 1095-Cs w/IRS by    February 28, 2018 (paper); April 2, 2018 (e-file);  Furnish Form 1095-Cs to Employees by March 2, 2018.
  • Deadlines for forms in the 1099 series, including Forms 1099-R related to retirement plan and IRA distributions;
  • Deadlines for employment and excise tax deposits (although penalties may be abated in certain instances); and
  • Other acts not specifically listed in Revenue Procedure 2007-56.

Other exclusions are referenced in the IRS announcement.  Detailed related information affecting benefit plans is found in Section 17 of Revenue Procedure 2007-56.

How do You Claim Relief?

If you qualify for relief and receive a late filing or late payment penalty notice from the IRS, you are advised to call the phone number on the notice to request that the IRS abate the penalty due to the disaster relief.   The IRS announcement states that the Service will automatically identify, and apply filing and penalty relief to, taxpayers located in the affected counties.  However taxpayers located outside the disaster area (for instance those whose tax records are stored in the damaged areas) will need to call the IRS disaster hotline at 866-562-5227 to request relief.

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