Estimated Tax Payment, Retirement Plan & COBRA Relief Granted
The U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) have issued several forms of relief to victims of Hurricane Harvey. Highlights of this relief include:
- Extension for Estimated Tax Payments: Businesses impacted by Hurricane Harvey will have until January 31, 2018to make quarterly estimated tax payments that were due on September 15, 2017 and January 16, 2018.
- Relaxed Rules for Retirement Plan Loans and Distributions: 401(k), 403(b), and 457(b) retirement plans will not be treated as failing to satisfy any requirement of the Internal Revenue Code or its corresponding regulations merely because the plan issues a loan or hardship distribution to a plan participant for a need arising from Hurricane Harvey. This relief applies to any hardship of the participant, including amounts to be used for food and shelter. Plan administrators may generally rely upon representations from the participant as to the need for and amount of a hardship distribution.
- Relaxed Enforcement of COBRA Administration Requirements: While an employer must continue to act reasonably, prudently, and in the interest of their employees in its administration of COBRA, the DOL's approach to COBRA enforcement for businesses impacted by Hurricane Harvey will include compliance assistance, grace periods, and other relief where appropriate.
The announced relief generally applies to businesses and individuals in areas designated for assistance by the Federal Emergency Management Agency (FEMA). Click here for a complete list of these designated areas.