In the wake of the recent disaster, the Journal of Accountancy has released an article outlining several tax relief measures for individuals and businesses affected by Hurricane Sandy in Connecticut, New Jersey and New York. As announced by the IRS, the relief applies to taxpayers living in locations the Federal Emergency Management Agency (FEMA) has determined disaster areas.

The relief being offered allows taxpayers to postpone filing fourth quarter individual estimated tax payments until Feb. 1, 2013. The postponement also applies to tax-exempt organizations required to file Form 990 series returns with a deadline falling in the same period.

Locations affected by the relief include:

• Connecticut: Fairfield, Middlesex, and New London counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within London County;
• New Jersey: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, Somerset, and Union counties;
• New York: Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, Suffolk, and Westchester counties.

The IRS also announced it will postpone any interest and any late payment or late filing penalties. Failure-to-deposit penalties will also be waived for federal payroll and excise tax deposits. The IRS is willing to work with taxpayers who reside outside of disaster areas but whose books and tax records are located in areas affected by the hurricane.

Hurricane Sandy has also been designated as a qualified disaster for purposes on Sec. 139, therefore, relief payments made to individuals by their employer or any person can be excluded from those individuals’ taxable income. This designation also means that employer-sponsored private foundations may provide disaster relief to employee-victims without affecting their tax-exempt status. The relief automatically applies to taxpayers located in the disaster areas. If you live outside the affected areas and think you may qualify for relief, please contact the IRS at 866-562-5227.

For more information, visit the Journal of Accountacy’s website.