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More Tax Relief for Victims of Hurricane Sandy

More Tax Relief for Victims of Hurricane Sandy

More Tax Relief for Victims of Hurricane Sandy

Hurricane Sandy, also known as Superstorm Sandy, was one of the deadliest and most destructive hurricanes to ever hit the United States. It devastated many parts of the East Coast, especially New York and New Jersey, where it caused billions of dollars worth of damage and left many people homeless.

In the aftermath of the storm, the federal government and several state governments provided tax relief to the affected individuals and businesses. But as the years went by, some of that relief expired, leaving many still struggling to recover.

Now, several years later, more tax relief for victims of Hurricane Sandy has been passed into law. This article will review that legislation, as well as provide an overview of the previous relief measures and their impact.

Tax Relief in the Aftermath of Hurricane Sandy

In response to the widespread damage caused by Hurricane Sandy, the federal government passed the Disaster Relief Act of 2012. This legislation provided tax relief to those affected by the storm in various ways, including:

1. Extended Filing Deadline for Tax Returns

Individuals and businesses affected by the storm were granted extra time to file their tax returns. For individuals, the deadline was extended to February 1, 2013, while for businesses it was extended to March 1, 2013.

2. Increased Casualty Loss Deduction

Victims of Hurricane Sandy were allowed to claim a higher casualty loss deduction on their taxes. This meant that they could deduct more of the losses they suffered due to the storm from their income, thus reducing their tax liability.

3. Expedited Refunds

The IRS was instructed to expedite refunds for those affected by the storm. This was to help them get much-needed funds to help rebuild their homes and businesses.

4. Tax-Exempt Bonds

State and local governments were allowed to issue tax-exempt bonds to fund the recovery from Hurricane Sandy. These bonds do not accrue interest and are not subject to federal taxes, making them a more attractive option for borrowing.

5. Employee Retention Credit

Businesses affected by the storm were eligible for an employee retention credit. This credit was worth up to $2,400 per employee and was designed to help businesses keep their workers employed while they recovered.

Impact of Tax Relief Measures

The tax relief measures put in place after Hurricane Sandy were incredibly important for those who were affected by the storm. They helped to ease the financial burden on individuals and businesses as they struggled to rebuild their homes and livelihoods.

For example, the extended filing deadline gave many people the extra time they needed to gather the necessary information to file their tax returns. This was particularly important for those who had lost important documents in the storm, such as receipts and financial records.

The increased casualty loss deduction was also very helpful. Victims of Hurricane Sandy suffered significant financial losses, and being able to deduct more of those losses from their income helped to reduce their tax liability and put more money back in their pockets.

Likewise, the expedited refunds provided victims with much-needed funds to help with recovery efforts. This was especially important for those who didn’t have the financial resources to start rebuilding without help.

The tax-exempt bonds and employee retention credit were also very helpful in spurring recovery efforts. By allowing governments to issue tax-exempt bonds, they were able to raise funds more easily and at a lower cost. And by providing businesses with a credit to help retain employees, they were able to keep their operations going while they tried to recover.

However, some of the tax relief measures put in place after Hurricane Sandy expired over time. This left many victims without the same level of support they had previously received. For example, the extended filing deadline and expedited refunds were only available for a limited time, and the increased casualty loss deduction expired at the end of 2013.

Thus, many victims of Hurricane Sandy have continued to struggle in the years since the storm. They may not have been able to rebuild as quickly as they would have liked, or they may have faced financial difficulties due to the expiration of the tax relief measures.

New Tax Relief for Victims of Hurricane Sandy

Fortunately, more tax relief for victims of Hurricane Sandy has recently been passed into law. On December 20, 2019, the Further Consolidated Appropriations Act, 2020 was signed into law, which included provisions to provide additional tax relief to those affected by the storm.

These new tax relief measures include:

1. Extension of Filing Deadline

Individuals and businesses affected by Hurricane Sandy now have until July 15, 2020, to file their tax returns for 2019. This extension also applies to estimated tax payments for the first and second quarters of 2020.

This is a significant extension that gives affected individuals and businesses more time to gather the necessary information to file their tax returns. It also gives them more time to assess their financial situation in light of the ongoing recovery efforts, which is especially important given the economic impact of the COVID-19 pandemic.

2. Increased Casualty Loss Deduction

The new legislation also extends the increased casualty loss deduction for victims of Hurricane Sandy through 2020. This means that they can continue to deduct more of their storm-related losses from their NY State income, reducing their tax liability and putting more money back in their pockets.

3. Special Rule for Retirement Plan Withdrawals

Individuals affected by Hurricane Sandy may now take qualified disaster distributions of up to $100,000 from their retirement plans without incurring the usual 10% penalty for early withdrawals. These distributions are also exempt from the usual mandatory 20% withholding tax.

This is designed to help those who are still struggling financially due to the storm. It gives them access to more of their retirement funds without incurring additional penalties or taxes, which can be a big help in trying to rebuild their homes and finances.

4. Increased Charitable Contribution Deductions

For those wishing to donate to Hurricane Sandy relief efforts, the legislation also includes an increase in the charitable contribution deduction limit. Individuals can now deduct up to 100% of their adjusted gross income for qualified contributions made in 2020.

This is designed to encourage more people to donate to the recovery efforts, which are ongoing even years after the storm. By allowing them to deduct more of their donations from their income, it makes charitable giving more attractive.

Impact of New Tax Relief Measures

The new tax relief measures passed into law in 2019 are incredibly important for victims of Hurricane Sandy who are still struggling to recover from the storm years later. The extension of the filing deadline and increased casualty loss deduction provide them with more time and financial support to navigate the ongoing recovery efforts.

The special rule for retirement plan withdrawals is also very helpful, as it gives affected individuals access to more of their retirement funds without incurring additional penalties or taxes. This can make a big difference in their ability to rebuild their homes and finances.

Finally, the increased charitable contribution deduction limit encourages more people to donate to the recovery efforts. This is especially important given that the recovery from Hurricane Sandy is an ongoing process that will require continued support and resources.

Conclusion

Hurricane Sandy was a devastating storm that left many people and businesses struggling to recover. The tax relief measures put in place after the storm were incredibly important, but some of them expired over time, leaving those still affected without the same level of support.

However, with the passage of the Further Consolidated Appropriations Act, 2020, more tax relief has been made available to those still struggling in the aftermath of the storm. The extension of the filing deadline, increased casualty loss deduction, special rule for retirement plan withdrawals, and increased charitable contribution deduction limit will all provide important support to those who need it most.

It’s important to continue to monitor the recovery efforts in the years to come and provide the resources and support necessary for affected individuals and businesses to fully recover from the storm.


The Internal Revenue Service (IRS) has announced more tax relief for businesses and individuals affected by Hurricane Sandy in Connecticut, New Jersey, and New York.  The IRS states that more areas will likely qualify for tax relief after FEMA conducts more damage assessments.

The newest wave of tax relief resulting from Hurricane Sandy involves deadlines that started in late October.  Affected taxpayers now have until February 1, 2013 to file returns and pay taxes that were originally due at the end of October.

The extension applies to fourth quarter estimated tax payments for individuals that are originally due on January 15, 2013.  The extension also applies to payroll and excise tax returns and any other payments for third and fourth quarters that were originally due on October 31, 2012 and January 31, 2013.  If you were required to file Form 990 for tax-exempt organizations, the extension applies as well.

If you received a late-payment or late-filing penalty after the storm and before November 26, 2012, you can have the penalties waived if you make a deposit before November 26, 2012.

The IRS has announced that it will clear any interest, late-payments, or late-filing penalties if the taxpayer qualifies for the extensions.  If you live in impacted parts of Connecticut, New Jersey, or New York, you do not need to contact the IRS to qualify for the extension.

The IRS is also helping taxpayers who reside outside of the counties listed by FEMA.  If you are worker who assisted in disaster relief after Hurricane Sandy and you are affiliated with a government or qualified organization, you can receive tax relief.  If you live outside of the designated area but believe you still qualify for relief, call (866) 562-5227.

Qualifying Areas in Connecticut:

•    Fairfield
•    Middlesex
•    New Haven
•    New London
•    Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation in New London County

Qualifying Areas in New Jersey:

•    Atlanti
•    Bergen
•     Burlington
•    Camden
•    Cape May
•    Cumberland
•    Essex
•    Gloucester
•    Hudson
•    Hunterdon
•    Mercer
•    Middlesex
•    Monmouth
•    Morris
•    Ocean
•    Passaic
•    Salem
•    Somerset
•    Sussex
•    Union
•    Warren

Qualifying Areas in New York:

•    Bronx
•    Kings
•    Nassau
•    New York
•    Queens
•    Richmond
•    Rockland
•    Suffolk
•    Westchester

Source: Internal Revenue Service