SALT Strategies

Hurricane Ida Tax Relief – New Jersey Provides “Big Apple-like” Relief While New York State and City “Cherry Pick” Taxpayer Relief

Ida update header - Hurricane Ida Tax Relief – New Jersey Provides “Big Apple-like” Relief While New York State and City “Cherry Pick” Taxpayer Relief

As noted in our recent alert, IR-2021-179 {“Tax Relief”} as initially issued and updated, provides comprehensive relief to business and individual taxpayers affected by Hurricane Ida in the Tri-State area.

As discussed in greater detail below, New Jersey’s Division of Taxation timely issued guidance indicating that, for the most part, New Jersey would follow the relief detailed by the IRS for New Jersey taxpayers in the designated areas mentioned in IR-2021-21 affected by Hurricane Ida.

On September 15th, New York State issued Tax Notice N-21-3 {“Notice”} that sets forth the State’s limited relief for those taxpayers in the designated areas. In summary, the Notice indicates that New York will provided limited relief for enumerated tax filings with due dates on or after September 15, 2021, and on or before October 2, 2021. The Notice as presently issued by the State does not provide relief for New York individual taxpayers in the designated areas with respect to their 2020 IT-201 or 2020 IT-203 returns that were previously extended and due on or before October 15, 2021.

Also on September 15th, New York City issued Finance Memorandum 21-03 {“Memo”} that sets forth the City’s limited relief for those taxpayers in the New York designated areas. The Memo indicates that New York City will provided limited relief for enumerated tax filings with due dates on or after September 15, 2021, and on or before October 2, 2021. For a list of the affected tax filings and payments for which the Memo provides a potential deferral, please see our discussion below.

Federal Relief as per IR-2021-179

On September 8th, the IRS issued Tax Relief that stated that Victims of Hurricane Ida in parts of New York and New Jersey now have until January 3, 2022, to file various individual and business tax returns and make tax payments. This is comparable to relief provided at the end of August to Ida victims in Louisiana.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA) that qualifies for individual or public assistance.

In New York, this initially included Bronx, Kings, New York, Queens, Richmond and Westchester counties, and in New Jersey, it included Bergen, Gloucester, Hunterdon, Middlesex, Passaic and Somerset counties.

Taxpayers in Hurricane Ida-impacted localities subsequently designated by FEMA in other parts of these 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.

On September 10th, the IRS provided an update to Tax Relief to include Nassau County. On September 14th, the IRS issued another update that indicated the relief will also be provided to businesses, individuals and taxpayers in Suffolk County and Sullivan County.

New Jersey – “Big Apple-like” Relief

New Jersey has indicated that it will follow the extended or deferred due dates provided by the Tax Relief for those affected taxpayers in the designated disaster areas indicated in the Tax Relief. The New Jersey Division of Taxation Notice sets forth how New Jersey would follow the IRS relief for affected taxpayers.

As mentioned above, the IRS updated Tax Relief twice since its initial issuance. The New Jersey Division of Taxation Notice indicating the State’s conformity with the relief provided was issued prior to either of the IRS’ updates to the Tax Relief that expanded Hurricane Ida affected areas to include Nassau, Suffolk and Sullivan counties. It would be logical as well as equitable that New Jersey automatically follows the IRS’ expanded definition of the designated relief areas with respect to New Jersey Division of Taxation’s relief provisions.

As of this writing, it is not conclusive that the State’s relief provisions will apply to taxpayers in those additional three counties who have New Jersey tax filings or payments covered by the Tax Relief.

The New Jersey Notice indicates in part:

  • Taxpayers affected by Ida now have until January 3, 2022, to file their New Jersey tax returns and submit payments, including estimated payments, which have either an original or extended due date between August 26, 2021 and January 3, 2022.
  • This means that individuals who had a valid extension to file their 2020 returns, scheduled to run out on October 15, will now have until January 3, 2022, to file. In addition, taxpayers may be eligible for abatement of penalty and interest on underpaid tax that would normally accrue during the period of the postponement.
  • Those who file a business or personal return electronically are advised to wait until they receive a notice from the New Jersey Division of Taxation. They should respond to that notice by requesting tax relief and indicating that they are in a Presidential Disaster Relief Area, Hurricane Ida.
  • Those who file a return by paper must write in black ink “Presidential Disaster Relief Area, Hurricane Ida” on the top of the return or payment.
  • Should the IRS further extend the filing deadline for federal tax purposes, the deadline for New Jersey returns and payments will also be extended.

The Division’s Ida Relief Webpage regarding the aforementioned is consistent with the above.

New York State’s Relief – Only for Due Dates on or after 9-15-2021 and on or before 10-2-2021

On September 15th, New York issued its Notice that set forth the State’s limited relief for those New York State taxpayers affected by Hurricane Ida.

The Notice states in part:

The Acting Tax Commissioner has extended certain tax filing and payment deadlines occurring during the period beginning on or after September 15, 2021, and ending on or before October 2, 2021, for:

    • filing any returns, including those for personal income tax, corporate taxes, sales tax and any other taxes administered by the Tax Department;
    • paying any tax or installment of tax, including installment payments of estimated taxes (however, see Exceptions, below, for certain deposits of withholding tax, metropolitan commuter transportation mobility tax (MCTMT), sales tax, prepaid sales tax and excise tax on motor fuel and diesel motor fuel, and petroleum business tax);
    • filing any requests for extensions or additional extensions of time to file; and
    • filing for a credit or refund.

The Notice indicates that for such affected returns, payments, extensions and credits/refunds, all of the aforementioned deadlines occurring during the period beginning on or after September 15, 2021, and ending on or before October 2, 2021, have been postponed to December 14, 2021. Interest at the appropriate underpayment rate must be paid on tax payments received after December 14, 2021.

Our initial take is that the “relief” primarily provides a deferral for:

  • 2020 Calendar Year Partnership Returns Previously Extended But Not Filed;
  • 2020 Calendar Year S corporation Returns Previously Extended But Not Filed;
  • 2020 Trust Returns Previously Extended due on or before September 30, 2021;
  • New York Sales tax returns due on or before September 20, 2021, i.e. for the quarter ended August 31, 2021.

The Notice does not provide relief for New York individual taxpayers’ 2020 IT-201 or 2020 IT-203 returns that were previously extended and are due on or before October 15, 2021.

Per the State’s 2021 Tax Calendar website, the following returns and payments are due on or after September 15, 2021 and on or before October 2, 2021:

September 15th

  • Personal income tax (and MCTMT if applicable) estimated tax payments due
  • New York S corporation return due for calendar year filers who requested an extension
  • Corporation tax (New York C corporation and New York S corporation) estimated tax payments due for calendar year filers
  • Partnership and LLC estimated tax payments due (NYS and MCTMT if applicable) (For payments required to be made on behalf of nonresident partners and members and C corporations)
  • S corporation estimated tax payments due (For payments required to be made on behalf of nonresident shareholders)

September 20th

September 30th

  • Fiduciary returns due for calendar year taxpayers who requested an automatic 5 and 1/2 month extension to file

The Notice contains additional potential New York State tax due dates and actions that are extended pursuant to the Notice. It also includes highly specific exceptions to the relief.

As this post is a summary, it is highly recommended that affected taxpayers and their tax advisors carefully review the applicability of the Notice.

New York City’s Relief – Broader than New York State’s but Still Limited

The Memo indicates a more comprehensive list of tax filings and payments that the City will provide a waiver or abatement of penalties than those indicated in the State’s Notice. Consistent with the State’s Notice, the Memo indicates that a waiver or abatement of penalties for certain DOF-administered taxes due between September 15, 2021, and October 2, 2021.

The Memo further states that the affected taxpayers may request to have the penalties waived or abated:

Business Corporation Tax, General Corporation Tax, Unincorporated Business Tax, and Banking Corporation Tax: Qualified taxpayers whose Business Corporation Tax (“BCT”), General Corporation Tax (“GCT”), Unincorporated Business Tax (“UBT”), or Banking Corporation Tax (“Bank Tax”) returns are due on or after September 15, 2021, and on or before October 2, 2021: Those taxpayers indicated above that cannot meet that deadline due to Hurricane Ida, may file and pay any tax due on or before December 14, 2021. Any filings made on or before December 14, 2021, will be considered timely and no late filing or late payment penalties will be imposed. This includes taxpayers who previously received extensions and whose extended due dates fall within the period commencing September 15, 2021, and ending on October 2, 2021.

Commercial Rent Tax (“CRT”) and Hotel Room Occupancy Tax (“HROT”): Qualified taxpayers whose quarterly CRT or HROT returns are due on or after September 15, 2021, and on or before October 2, 2021, and who are unable to file on time due to Hurricane Ida, may file and pay on or before December 14, 2021, and no late filing or late payment penalties will be imposed.

Real Property Transfer Tax: Qualified taxpayers whose Real Property Transfer Tax returns were due or are due on or after September 15, 2021, and on or before October 2, 2021, and who are or were unable to file on time due to Hurricane Ida, may file and pay on or before December 14, 2021, and no late filing or late payment penalties will be imposed.

Utility Tax: Qualified taxpayers whose monthly Utility Tax returns are due on or after September 15, 2021, and on or before October 2, 2021, and who are unable to file on time due to Hurricane Ida, may file on or before December 14, 2021, and such filings will be considered timely.

The Memo states that “for purposes of the above filings, while late filing and late payment penalties are waived, the Administrative Code requires that interest, where applicable, at the appropriate underpayment rate, must be paid on all tax payments received after the original due date calculated from the original due date to the date of payment.”

“Qualified Taxpayers” are as follows:

  • Those taxpayers who are in the counties in New York State that were so specified include Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk, Sullivan and Westchester.
  • The relief will also apply to taxpayers directly affected by the storm located in any additional counties in New York State that are declared disaster areas eligible for individual assistance and federal tax relief after this notice is issued.
  • The relief will also apply to taxpayers directly affected by the storm in counties in other states meeting the above criteria

It is highly recommended that New York City taxpayers and their advisors review the Memo to determine if their tax filings or payments are eligible for relief pursuant to the Memo.

The Take Away – Thank You New Jersey & Here’s to New York Ultimately Providing “Big Apple” Relief

Taxpayers and their tax advisors in the Tri-State area affected by Hurricane Ida are both grateful and thankful for the IRS relief provided by the Tax Relief and for New Jersey’s Division of Taxation’s quick action conforming to that relief.

Hopefully Albany will soon issue a supplemental notice that provides real “Big Apple” relief to Hurricane Ida affected New York taxpayers that will address their lack of conformity with Tax Relief.

Most importantly, we earnestly await the State’s timely addressing of the issue with respect to those affected New York individual taxpayers for which Tax Relief provides an extended due date of January 3, 2022 to file their 2020 Federal 1040s, but for whom the State requires that their IT-201 or IT-203 remain due on or before October 15, 2021.


Related: IRS Announces Tax Relief for New York & New Jersey Victims of Remnants of Hurricane Ida