Click here to read the article
Adams and Reese Construction Team Co-Leader and Partner Trent Cotney authored a recent article on the Internal Revenue Service (IRS) announcing relief for Florida residents following the 2024 hurricanes. “The IRS Issues Important Hurricane Relief and Employee Retention Credit News” is published in Roofing magazine.
Cotney is a leading member of one of the largest construction practices in the country with more than 90 attorneys on the construction team. A Partner in the Adams and Reese Tampa office, Cotney represents construction and infrastructure clients. Cotney is a board-certified construction lawyer licensed in eight states and Washington, DC. Cotney is an EU arbitrator for construction-related disputes.
Below is the article printed by Roofing Magazine.
The IRS Issues Important Hurricane Relief and Employee Retention Credit News
Posted By: Trent Cotney November 20, 2024
As people across the Southeast try to clean up, repair, and get back to normal after the devastating effects of Hurricanes Milton and Helene, the Internal Revenue Service (IRS) has made announcements that may prove helpful. The agency has also begun processing about 400,000 Employee Retention Credit (ERC) claims.
IRS Announcements
On October 11, 2024, the IRS issued the following announcements, which are likely welcome news to those impacted by the storms.
- IR-2024-264—Hurricane Milton Relief for Individuals and Businesses In Florida: This announcement provides assistance to people and businesses in 51 Florida counties, starting on October 4, 2024, and ending on May 1, 2025. This coverage includes people and companies in six counties — Broward, Indian River, Martin, Miami-Dade, Palm Beach, and St. Lucie — that did not qualify for relief under Hurricanes Helene and Debby. Relief is also extended to individuals and businesses in 20 counties covered under Debby but not Helene. Due to the effects of Milton, they will receive disaster tax relief starting from August 1, 2024, until May 1, 2025. These counties are Baker, Brevard, Clay, DeSoto, Duval, Flagler, Glades, Hardee, Hendry, Highlands, Lake, Nassau, Okeechobee, Orange, Osceola, Polk, Putnam, Seminole, St. Johns, and Volusia. This move means that all affected taxpayers in Florida are allowed until May 1, 2025, to file their federal individual and business tax returns and make payments. The relief also applies to 2024 individual and business returns usually filed during March and April 2025, as well as 2023 individual and corporate returns with justifiable extensions and quarterly estimated tax payments. The IRS is offering relief to all areas identified by the Federal Emergency Management Agency (FEMA). Tax relief is available to individuals living in or owning businesses in the aforementioned counties. The current list of eligible localities is located on the IRS website under at Tax relief in disaster situations (https://www.irs.gov/newsroom/tax-relief-in-disaster-situations).
- IR-2024-265—Granting Dyed Diesel Penalty Relief: Due to the effects of Hurricane Milton, the IRS is refraining from imposing penalties for dyed diesel fuel with a sulfur content not exceeding 15 parts per million used or sold for use on the highway throughout Florida. This penalty relief is available to anyone who uses or sells dyed diesel fuel in vehicles intended for highway use. During the relief period, the IRS will not penalize parties that fail to make semimonthly tax deposits for dyed diesel fuel used in or sold for diesel-powered vehicles on Florida highways. Usually, dyed diesel is used for farming and home heating or sold to local governments, making it exempt from excise taxes. More information about the tax requirements is available at IRS Publication 510, Excise Taxes (https://www.irs.gov/forms-pubs/about-publication-510).
- IR-2024-266—Help for Hurricane Milton and Helene Victims: The IRS is offering tax-related assistance to those impacted by these storms. The agency has set a May 1, 2025, deadline for tax filings and payments, giving individuals and businesses more time. In addition, the agency reminds taxpayers that disaster payments are generally not taxed, and they may qualify for disaster loss deductions. Also, those who participate in retirement plans may be able to take disaster-related distributions without penalty. For more information, disaster victims are encouraged to call the IRS disaster hotline at 866-562-5227.
Employee Retention Credit Announcement
On October 10, the IRS announced, with IR-2024-266, that it was continuing to process Employee Retention Credit claims. Approximately 400,000 claims are in progress, totaling some $10 billion of eligible claims. The agency is still navigating a substantial amount of claims from the pandemic-era credit, so claims for small businesses are ongoing. Many ERC claims originated due to aggressive marketing by promoters, resulting in a significant batch of unfounded and ineligible claims. The current claims being processed include both eligible and ineligible claims. Refund checks are being mailed for eligible claims, and more are expected in the coming weeks and months.
Final Thoughts
These are challenging times for individuals and small businesses with many suffering losses that far exceed insurance coverage. As a result, make sure to discuss the potential for tax relief with your CPA.
Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.
About the author: Trent Cotney is a partner and Construction Practice Group Leader at the law firm of Adams and Reese LLP and NRCA General Counsel. For more information, call (866) 303-5868 or email trent.cotney@arlaw.com.