The IRS and the Texas Comptroller have announced measures to provide relief to certain taxpayers affected by Hurricane Harvey.

Federal Tax Relief

Extension of Filing and Payment Deadlines

The IRS announced on August 28, 2017, that it has extended until January 31, 2018, certain tax payment and filing deadlines for certain individuals and businesses affected by Hurricane Harvey in any area designated by the Federal Emergency Management Agency (FEMA) as a federal disaster area qualifying for individual assistance. As of August 30, FEMA has designated 29 Texas counties as covered disaster areas: Aransas, Bee, Brazoria, Calhoun, Chambers, Colorado, Fayette, Fort Bend, Galveston, Goliad, Hardin, Harris, Jackson, Jasper, Jefferson, Kleberg, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Refugio, Sabine, San Jacinto, San Patricio, Victoria, Waller, and Wharton. Furthermore, any area subsequently designated by FEMA will automatically qualify for the same relief.

The following individuals and entities qualify for relief:

  • any individual whose principal residence, and any business entity whose principal place of business, is located in a covered disaster area;
  • any individual who is a relief worker assisting in a covered disaster area;
  • any individual whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;
  • any estate or trust that has tax records necessary to meet a filing or payment deadline in a covered disaster area; and
  • any spouse of an affected taxpayer, solely with regard to a joint return.

The announcement postpones various federal tax filing and payment deadlines that occurred starting on August 23, 2017. Accordingly, the aforementioned affected individuals and businesses will have until January 31, 2018, to file federal returns and pay any taxes that were originally due during this period, including:

  • Quarterly estimated tax payments due September 15, 2017 and January 16, 2018;
  • Quarterly payroll and excise tax returns due October 31, 2017;
  • 2016 individual income tax returns for which taxpayers received a tax-filing extension until October 16, 2017 (tax payments related to these 2016 returns were due on April 18, 2017, and are not eligible for relief); and
  • Late payment penalties for federal payroll and excise tax deposits normally due on or after August 23, 2017, and before September 7, 2017, if the deposits are made by September 7, 2017.

For additional information, please see IRS News Release IR-2017-135 and IRS News Release TX-2017-09.

Texas State Tax Relief

Additionally, The Texas Comptroller of Public Accounts announced that taxpayers in the FEMA-designated disaster areas affected by Hurricane Harvey can postpone paying state taxes while they recover from storm-related losses. Businesses located in those areas can call the Comptroller’s office and request up to a 90-day extension to file and pay certain monthly and quarterly state taxes. Additionally, the announcement reminds taxpayers that Texas law exempts certain recovery-related expenses from sales tax, including charges for labor to repair or restore items (furniture, appliances, clothing, etc.) damaged by a declared natural disaster. An exemption certificate indicating the reason for the exemption (e.g., “Repair of damaged tree due to a declared natural disaster in Harris County”) is required to claim an exemption from sales tax.

For additional information, please see the Texas Comptroller Announcement. To obtain the applicable tax exemption forms, taxpayers should call (800) 252-5555 or visit http://comptroller.texas.gov/taxes/resources/disaster-relief.php.