of the Administration’s efforts to bring all available resources to bear to
support state and local partners, the U.S.
Department of the Treasury and its bureaus are providing a broad array of
assistance to individuals and businesses impacted by Hurricane Sandy. Since the storm, Treasury has reminded servicers of existing mortgage forbearance, and activated and
authorized housing and other tax relief programs to ease burdens on
those affected. The following outlines a number of specific ways Treasury
is supporting affected individuals and businesses.
Earlier this week, Treasury
provided guidance to mortgage servicers participating in the Making Home Affordable Program about options
available to homeowners affected by Hurricane Sandy. Under the program's
guidelines, servicers must offer a minimum of three months forbearance
to any Making Home Affordable-eligible homeowner who requests a forbearance and
whose property or principal place of business or employment is located in an
area designated by the Federal Emergency Management Agency (FEMA) as being
covered by the disaster as set forth at www.fema.gov/news/disasters.fema or as confirmed by a local FEMA office. There are
currently more than 60,000 homeowners participating in the Making Home
Affordable Program in the New York metropolitan area.
Additionally, if a homeowner is
being considered for or has received assistance under the Making Home
Affordable Program and misses one or more mortgage payments, Treasury has
directed servicers not to take any action that would adversely affect
eligibility for the program unless there is contact with the homeowner to
establish whether he or she requires forbearance.
Treasury has also encouraged
participating servicers to make extra effort to reach out to homeowners who may
be eligible for assistance in impacted areas and allow homeowners additional
time to respond and provide necessary documentation.
Here are tax relief measures
taken to assist those affected by Hurricane Sandy:
Postponed Filing Deadlines: For affected taxpayers in Connecticut, New
Jersey, and New York, the IRS has postponed various filing and payment
deadlines. As a result, affected
individuals and businesses will have until February 1, 2013, to file the fourth
quarter individual estimated tax payment, normally due January 15, 2013, and
payroll and excise tax returns and accompanying payments for the third and
fourth quarters, normally due on October 31, 2012, and January 31, 2013,
respectively. It also applies to tax-exempt
organizations required to file Form 990 series returns with an original or
extended deadline falling during this period.
Donation Programs: Under these programs, employees may donate
their vacation, sick, or personal leave in exchange for employer cash payments
made to qualified tax-exempt organizations providing relief for the victims of
Hurricane Sandy. Employees can forgo
leave in exchange for employer cash payments made before January 1, 2014. The donated leave will not be included in the
income or wages of the employees, and employers will be permitted to deduct the
amount of the cash payment.
Low-Income Housing Tax Credit Waivers: Because of
the widespread devastation to housing caused by Hurricane Sandy, IRS announced
that they will temporarily waive the income limitation and non-transient
requirements of the low-income housing tax credit (LIHTC) rules for qualified
low-income housing projects that provide housing to those affected by Hurricane
Disaster Relief Payments Excluded from Taxable Income: Because
Hurricane Sandy is designated as a qualified disaster for federal tax purposes,
the IRS has alerted employers and other taxpayers that qualified disaster
relief payments made to individuals by their employer or any person can be
excluded from those individuals’ taxable income. These payments include amounts to cover
necessary personal, family, living, or funeral expenses that were not covered
by insurance. They also include expenses
to repair or rehabilitate personal residences or repair or replace the contents
to the extent that they were not covered by insurance.
Penalties: In response to shortages of clear diesel fuel caused by
Hurricane Sandy, the IRS will not impose a tax penalty when dyed diesel fuel is
sold for use or used on the highways in New Jersey, New York, and Pennsylvania
through November 20, 2012. This penalty
relief is available to any person who sells or uses dyed fuel for highway
use. Ordinarily, dyed diesel fuel is not
taxed, because it is sold for uses exempt from excise tax, such as to farmers
for farming purposes, for home heating use, and to local governments for public
transportation. Similarly, IRS will not impose a tax penalty on a failure to
meet the requirements of EPA highway diesel fuel sulfur content regulations if
EPA has waived those requirements.
Tax-Exempt Status: While Treasury encourages people to use existing
organizations currently working on immediate aid efforts, the IRS has agreed to
provide expedited review and approval for organizations seeking tax-exempt
status to provide relief for victims of Hurricane Sandy. Organizations seeking tax-exempt status can
apply by filing IRS Form 1023 and write at the top of the form “Disaster
Relief, Hurricane Sandy.” The IRS will
give such applications expedited attention to ensure they meet legal
requirements. Organizations seeking to provide relief for
victims of Hurricane Sandy that have already submitted an application can fax
a request labeled "Disaster Relief, Hurricane Sandy" that
includes the organization's name, Employer Identification Number,
contact name, and phone number to 513-263-4554 to be given the same
As the response and recovery moves
forward, Treasury will continue to provide assistance and support for affected
residents and business owners as they rebuild their communities.
Nani Coloretti is the acting Assistant Secretary for
Management at the U.S. Department of the Treasury.