Owing to the continuous terrorist attacks in the state of Israel from October 7, 2023, the Internal Revenue Service has issued news released on tax reliefs for the taxpayers affected by the attack. The IRS has proposed certain postpones in deadlines for Forms that relate to Health Savings Accounts, Coverdell Education Savings Accounts, retirement accounts, etc. Let us discuss these concessions and relaxations in detail here.
Tax concessions proposed by IRS for war victims
The Internal Revenue Service has announced to offer tax relief for people and businesses that are affected by the terror attacks in Israel.
Business owners who are not able to meet their tax filing and payment obligations owing to the war can postpone the due dates for filing and payments. They will be given time until October 7, 2024, to file their returns and to make tax payments.
IRS has postponed all taxpayer acts with due dates falling on or before October 7, 2023, and now has a filing extension till October 7, 2024.
Who is eligible to avail of the tax payment relief proposed by the IRS?
The following individuals and businesses are covered under the new tax payment relief proposed by the IRS.
- Individuals whose principal residence is in the state of Israel.
- Any business sole proprietor or business entity or the principal place of business is located in Israel, Gaza, or the West Bank.
- Any individual who is affiliated with a recognized philanthropic organization or is working as a relief worker, giving his assistance in Israel.
- Individuals, business entities, estates, or trusts whose tax return preparers are located in the Gaza or West Bank.
- Spouse of the affected taxpayers, with regard to joint tax returns of two married people.
- Individual visiting Israel was killed, injured, or taken hostage as a result of the terrorist attacks.
IRS relief measures for tax filing and tax payments
IRS has postponed the tax filing and tax payment deadlines. As a result war, affected businesses and individuals will have time till October 7, 2024, to file their returns and pay their taxes, which were originally due by October 7, 2023.
Individuals who have filed extensions for their 2022 returns and whose deadline falls on October 16, 2023, however, have more time to file their returns but not to pay their taxes. Similarly, corporations whose 2022 extensions close on October 16, 2023, have more time to file their returns but not to pay their taxes.
The IRS has postponed individual and business returns and business payments that are normally due on March 15th and April 15th, 2024. These individuals will now have more time to file their returns and also pay their taxes. The IRS has also given time relaxation on the following payments and returns.
- Quarterly estimated income tax payments that are due on January 16th, April 15th, June 17th, and September 16th, 2024.
- Quarterly excise tax and payroll returns that are due on October 31st, 2023, and January 31, April 30, and July 31, 2024.
- IRS offers tax relief measures for calendar year tax-exempt organizations as well, whose extensions run out on November 15th, 2023.
- It also has announced tax relief measures for contributors to retirement plans.
Apart from all these relief measures, the IRS has also abated the penalty for failure to make excise tax deposits and payroll deposits that are due on or after October 7, 2023, and before November 6th, 2023.
The IRS automatically identifies the affected taxpayers, whose primary residence or principal place of business is in the war zone, on the basis of previously filed returns and offers relief for them. Other taxpayers who are eligible to obtain this relief can avail them by calling IRS disaster hotlines.