IRS tax relief to Irene victims: Do you qualify?

IRS says residents in hard-hit areas of New Jersey, New York, and North Carolina will get an extension until Oct. 31 to make tax payments and file certain IRS returns.

Americans living in parts of three states hit hard by hurricane Irene have extra time to file certain returns and make tax payments, the Internal Revenue Service announced Thursday.

In certain counties of New Jersey, New York, and North Carolina, businesses and residents will have September and October filing deadlines pushed back to Oct. 31.

For example: Individuals and businesses who had already received an extension to file their 2010 returns will have their filing deadline extended from Sept. 15 to Oct. 31. Ditto for corporations and businesses who had an Oct. 17 deadline; they can now file as late as Oct. 31.

Also, those individuals and businesses making estimated tax payments for the third quarter, normally due Sept. 15, can now make them as late as Oct. 31. Other federal tax transactions can also be delayed. See the IRS announcement for details.

Not only do taxpayers in those areas get more time to file their returns, they also won’t be charged additional interest or penalties. Typically, a taxpayer who asks for an extension to file his annual return still has to pay an interest charge if he owes the government money. Under the tax relief provision, however, the interest only accrues from April 15 through Sept. 15. There’s no extra charge if the taxpayer doesn’t file until Oct. 31.

“The disaster relief stops the clock on any penalties and interest., says an IRS spokesman.

To qualify, residents and businesses must be located in the counties declared federal disaster areas. So far, that includes seven counties in North Carolina (Beaufort, Carteret, Craven, Dare, Hyde, Pamlico, and Tyrell), five counties of New Jersey (Bergen, Essex, Morris, Passaic, and Somerset), and eight counties of New York (Albany, Delaware, Dutchess, Essex, Greene, Schenectady, Schoharie, and Ulster ).

“The IRS expects to announce tax relief for taxpayers in other areas as damage assessments continue,” the agency said in a statement.

Typically, taxpayers don’t have to request the relief. The IRS automatically identifies them. But taxpayers who don’t live in the area but whose tax records are located there also qualify for the relief. And they will have to contact the IRS disaster hotline at 866-562-5227 to request relief. The same holds true for relief workers who provided services in the affected areas. They qualify for relief but they’ll have to call in to get it.