Federal, state tax relief
The IRS says storm victims have until Jan. 15, 2021 to file various individual and business federal tax returns and make tax payments.
The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. Currently, this includes Baldwin, Escambia, and Mobile counties in Alabama, but taxpayers in localities qualifying for individual assistance added later to the disaster area, elsewhere in the state and in neighboring states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 14, 2020. As a result, affected individuals and businesses will have until Jan. 15, 2021, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2019 return due to run out on Oct. 15, 2020, will now have until Jan. 15, 2021, to file.
The Jan. 15, 2021, deadline also applies to quarterly estimated income tax payments due on Sept. 15, 2020, and the quarterly payroll and excise tax returns normally due on Nov. 2, 2020. Click here to learn more about the IRS federal tax relief.
The state Department of Revenue, meanwhile, is offering tax relief to Alabama taxpayers who reside or have a business in Baldwin, Escambia, and Mobile counties and have been affected by damage caused by Hurricane Sally.
The state will grant filing extensions to taxpayers directly affected by Hurricane Sally. Alabama taxpayers residing in areas designated as disaster areas by the federal government have until Jan. 15, 2021, to file tax returns due on or after Sept. 15, 2020, and before Jan. 15, 2021. Penalty relief will be provided during the extension period. Taxpayers seeking this Alabama tax relief should write “Sally Relief – 2020” in red ink on any state paper return/report which relies on this filing extension relief.
Affected taxpayers filing electronically for Individual Income Tax, Corporate Income Tax, Pass-through Entities, Business Privilege Tax, or Withholding Tax may submit a penalty waiver request using the department’s Form PWR, which can be accessed on the department’s website. Taxpayers may submit the form to the Department’s Income Tax Administration Division at the address on the form. Taxpayers may contact the following ALDOR offices by telephone for any additional filing guidance:
- Sales and Use Tax: 334-242-1490
- Individual Income Tax: 334-353-0602
- Corporate Income Tax: 334-242-1200
- Pass-through Entities: 334-242-1033
- Business Privilege Tax: 334-353-7923
- Withholding Tax: 334-242-1300
For more information on this relief, including a list of the eligible localities, view the IRS announcement here. Taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
Navigating the Claims Process
If your home or business is impacted by the storm, consider the following when it comes time to file and resolve your claim:
After the storm passes, call your insurance company.
At a minimum, you’ll want to ask:
- What types of damage are covered?
- How long will it take to process my claim?
- Will I need to obtain estimates for repairs?
Make temporary repairs.
While it’s OK to take steps to protect your property from further damage, you should hold off on making extensive permanent repairs until the claims adjuster (a person professionally trained to assess the damage) has visited your business and assessed the damages. Make sure you save receipts for what you spend on repairs.
Prepare for the adjuster’s visits.
The more information you have about your damaged property ––descriptions of as many items as possible, approximate date of purchase and what it would cost to replace or repair them––the faster your claim can be settled.
- To substantiate your loss, prepare an inventory of damaged or destroyed items and give a copy to the adjuster, along with copies of any receipts. Don’t throw out damaged items until the adjuster has visited. You should also consider photographing or videotaping the damage. If your property was destroyed, or you no longer have any records, work from memory.
- Identify structural damage to your business and any supporting structures. Make a list of everything you want to show the adjuster, such as cracks in the walls and missing roof tiles. You should also get the electrical system checked. Most insurance companies pay for these inspections.
- Get written bids from licensed contractors. The bids should include details of the materials to be used and prices on a line-by-line basis. This makes adjusting the claim faster and simpler.
- Keep copies of the lists and other documents you submit to your insurance company. Also, keep copies of whatever paperwork your insurance company gives you and record the names and phone numbers of everyone to whom you speak.
After your claim has been settled and the repair work is underway.
Take the time to re-evaluate your insurance coverage. Was your business adequately insured? Did you have replacement cost coverage for all of your assets? Talk to your insurance agent about possible changes.
- Have an emergency response plan. Determine your evacuation routes. Establish meeting places. Keep emergency phone numbers handy.
- Develop a communications plan. Designate someone to serve as a contact person for your employees, customers, and vendors. Phone and email in your area may be down following a natural disaster, so ask an out-of-state friend, colleague or relative to serve as a post-disaster point of contact.
- Backup your business records. Make copies of your any vital records and store them someplace safe. Use online backups for electronic data, and keep paper documents in a fireproof safety deposit box.
- Create a disaster kit. Put a flashlight, a portable radio, fresh batteries, fresh first-aid supplies, non-perishable food, bottled water, a basic tool kit, plastic sheeting and garbage bags in a bag or box someplace handy, in case of emergency. Encourage your employees to prepare disaster kits for themselves and their families.
