Wildfire Victims May be Eligible for Hawaii Tax Relief
Taxpayers affected by the wildfire disasters in Hawaii counties may now receive various forms of Hawaii tax relief, according to an announcement from the state’s Department of Taxation (DOT). The DOT has released details about how those affected can take advantage of this tax relief, which this article will go through in detail.
Hawaii DOT will give special consideration on a case-by-case basis to those taxpayers adversely affected. This includes extensions for tax filing and paying various taxes, such as general excise (sales tax), transient accommodations, net income, tobacco, and liquor; waivers of penalties and interest; or any other form of assistance due to interruptions in mail delivery.
For those submitting their taxes via paper, write “2023 Wildfire Relief” on the top center of the return. Meanwhile, when filing electronically through Hawaii Tax Online, one must send a message selecting “I have a 2023 Wildfire Relief Question” in order to receive relief.
Those needing assistance due to the wildfire disaster should be sure to include a concise explanation when filing for tax relief. This statement should articulate what kind of help is requested and how the devastation has impacted their ability to meet tax obligations.
Individuals, businesses, and others can be considered “adversely affected taxpayers” when they cannot file tax returns or make payments due to the wildfire disaster.
The governor has declared certain areas to be disaster zones. Consequently, any funds from a property or casualty insurance policy resulting from the damage or loss of inventory utilized in a business within such an area are excused from General Excise Tax (GET).
For those affected by the Hawaii wildfires, there are specific tax relief regulations regarding Payment and Filing Relief and Extensions, Collections Relief and Extensions, and Taxability and Deduction.
Details on Payment Relief, Filing Relief, and Filing Extensions
Tax Filing Deadlines Extended for All Taxpayers?
Whether tax deadlines are extended for every taxpayer cannot be answered in the affirmative. Instead, the Department of Taxation (“Department”) has established that requests for tax filing extensions and waivers of late payment penalties and interest can be assessed on a case-by-case basis.
How do I request a waiver of penalties and interest from the Tax Relief?
Are you facing financial hardship due to the Hawaii wildfire disaster? Requesting a waiver of penalties and interest could be the solution. When filing by paper, add “2023 Wildfire Relief” to the top center of your return. Additionally, include with your tax filing a statement that explains why you have been adversely affected by the event.
When electronically filing, please be sure to get in touch with a free dedicated tax professional to help you explain how the wildfire disaster is negatively impacting you to the DOT of Hawaii.
I could not file on time due to a lack of electricity or internet due to the wildfires. Is that a good cause for a tax filing extension request?
Absolutely. Due to the devastating wildfires, tax filing can be delayed as a lack of electricity and internet made it impossible. Showing that you were affected by the fires would make you eligible to request a waiver or extension on penalties or interest.
Will this tax relief stay available? How soon will the DOT stop accepting requests for tax relief?
For what duration is relief available? As long as the Director determines necessary to counteract the effect of the wildfires, the Department will carry on considering requests for aid.
Do I still need to pay estimated taxes?
Should I submit estimated taxes? The answer is a resounding Yes. Even with the aftermath of the 2023 Hawaii wildfires, you may request extra time to make the necessary payments. To learn how to go about it, get in touch with our free, dedicated tax professional.
Is there any relief for taxpayers impacted by the Maui and Hawaii wildfires already under an installment payment agreement with the DOT?
Taxpayers will be obligated to resume installment payments following their payment plan. For further details, please get in touch with a dedicated PriorTax Tax Professional for free support from start to finish.
Taxpayers must restart their installment payments in order to comply with their current plan. Please reach out to your assigned collector for more info. If you do not have a contact detail, such as an email or a number, please call a relevant office and ask them to contact your collector.
Is tax relief available for a taxpayer with a property lien impacted by the Hawaii wildfires?
Those property owners affected by the wildfires in Hawaii may be wondering how they can access relief from their property lien dues. At present, the Department will not be providing a release of these liens. However, they could qualify for other forms of assistance, such as waiving interest during this difficult period. Get in touch with a free, dedicated Tax Professional to support your tax relief.
Details on Taxability and Deduction
Damages and Losses from Hawaii Wildfire Enable to Deduct from Tax Returns?
Which damages and losses can I declare on my taxes? We recommend that taxpayers speak with a dedicated tax professional or the IRS to determine suitable tax deductions. Concerning Hawaii income tax, the DOT aligns with section 165 of the Internal Revenue Code, addressed in Publication 547 from the Internal Revenue Service. Please refer to Tax Announcement 2023-03, under section II, to further investigate casualty loss claims.
Is the tax relief taxable?
Regarding taxation, one question lingers: Are tax relief payments taxable? It varies depending on the source of the funds and the purpose for which they are used. To elaborate further, please look at Tax Announcement 2023-03 and section IV to learn more about disaster relief payments.
Are donations to Hawaii Wildfire tax deductible?
The answer is yes. You may deduct donations from your taxes, but only under certain conditions. All donations and gifts from registered and qualified non-profit organizations will be eligible for tax deductions. However, contributions made to individuals or unregistered groups do not qualify. It is necessary to provide proof of the donation to receive the deduction on your taxes.