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People and businesses in areas that have been hit by disasters will now have a longer grace period for paying their taxes, thanks to new legislation. H.R. 517, the Filing Relief for Natural Disasters Act, just passed the Senate, and is on its way to President Donald Trump to be signed, the Journal of Accountancy reported.
The act will allow the IRS to grant tax relief in places that states have officially declared disaster areas. Previously, the IRS was only permitted to give extensions to places that had been federally declared disaster areas. But the federal government can sometimes be slow to make an official disaster declaration.
As Judy Chu, a California representative and one of the co-sponsors of the bill, noted, “[F]or many disasters, federal declarations may come days or even weeks after the state declaration, leaving open the question of whether the IRS will be able to give disaster victims timely filing relief.” Chu’s district was hit hard by the Eaton Fire this January. She described the law as “a common-sense, bipartisan solution to this problem that will give the IRS the authority to bypass bureaucratic delays and immediately extend tax filing deadlines after state-declared disasters and states of emergency.”
The legislation also expands some of the automatic extensions the IRS grants in the event of disasters, from 60 days to 120. Those extensions apply to federal tax deadlines for people injured or killed in a disaster; for certain relief workers; and for people whose residence, business, or tax records are located in a disaster area.
The act was first proposed in January and passed the House in April. It passed in the Senate unanimously.