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IRS Provides Tax Relief for Victims of Volcanic Eruptions and Earthquakes in Hawaii

EBIA  

EBIA  

The IRS has announced tax relief for victims of volcanic eruptions and earthquakes that occurred starting on May 3, 2018, in Hawaii, including a delayed due date of September 17, 2018, for filing certain individual and business tax returns. The extension applies to various tax filings and payment deadlines falling on or after May 3, 2018, and is available to taxpayers who reside or have a business in Hawaii county. (As background, Code § 7508A authorizes the IRS to postpone certain deadlines in the event of a presidentially declared disaster or other specified events; details are set forth in regulations and in Rev. Proc. 2007-56.) Taxpayers located outside Hawaii county who have records within the affected area that are necessary to complete tax filings must contact the IRS to request the extension relief.

The relief applies to Form 5500 filings as described in Rev. Proc. 2007-56, which indicates that disaster extensions permitted by the IRS will also be permitted by the DOL. In addition, penalties on employment and excise tax deposits due on or after May 3, 2018, and ending May 18, 2018, are abated so long as the deposits were made by May 18, 2018. The relief does not, however, apply to most information return filings, such as Forms W-2, 1094, and 1095.

EBIA Comment: This will be welcome news for businesses in the affected area with Form 5500 filing deadlines within the covered period. (Note that the regular Form 5500 due date for calendar-year plans is July 31.) Plan administrators with service providers in the area should also keep the relief in mind if they have difficulty gathering the documentation needed to complete their returns. Notwithstanding this relief, some filers may wish to file Form 5558 (Application for Extension of Time to File Certain Employee Returns), which, if timely filed, provides an automatic 2-1/2 month extension (i.e., to October 15 for calendar-year plans). The relief does not address whether it applies to Form 5558, so the Form 5558 should be filed by the regular Form 5500 due date to ensure triggering the 2-1/2 month extension. For more information, see EBIA’s ERISA Compliance manual at Section XXII.F (“Form 5500 Mechanics: Who, What, When, and How”) and EBIA’s 401(k) Plans manual at Section XXXI.B.2.d (“Special Extensions Granted for Natural Disasters and Other Events”).

Contributing Editors: EBIA Staff.

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