Postponed Deadlines for Time-Sensitive Acts For Disaster Victims

(September 14, 2021) (Original article was posted on September 9, 2021) “Affected taxpayers" who are victims of certain federally declared disasters are eligible for postponed deadlines for the completion of eligible time-sensitive acts, many of which are related to IRAs, employer plans, HSAs, or Coverdell ESAs, when the original deadline falls within a given time period. For example, an affected taxpayer of the California wildfires who was to remove a 2020 Traditional IRA excess contribution along with the net income attributable by October 15, 2021, now has until January 3, 2022, to complete the transaction.

Affected Taxpayers Eligible for Postponed Deadlines
The chart below summarizes recent disaster areas (as of September 8, 2021), in which affected taxpayers qualify for postponed time periods to complete eligible time-sensitive acts. Up-to-date details of who is considered an affected taxpayer for each declaration can be found here.

 

Disaster Area

Original Deadline For Time-Sensitive Act

Postponed Deadline to Complete Act

Michigan severe storms, flooding and tornadoes

On/after June 25, 2021, and before November 1, 2021

November 1, 2021

California wildfires

On/after July 14, and before November 15, 2021

November 15, 2021

North Carolina Tropical Storm Fred

On/after August 16, 2021, and before December 15, 2021

December 15, 2021

Tennessee severe storms and flooding

On/after August 21, 2021, and before January 3, 2022

January 3, 2022

Louisiana Hurricane Ida

On/after August 26, 2021, and before January 3, 2022

January 3, 2022

Mississippi Hurricane Ida

On/after August 28, 2021, and before November 1, 2021

November 1, 2021

Pennsylvania Hurricane Ida

On/after August 31, 2021, and before January 3, 2022

January 3, 2022

New Jersey and New York Hurricane Ida

On/after September 1, 2021, and before January 3, 2022

January 3, 2022

Time-Sensitive Acts
The time-sensitive acts identified that are eligible for the extended deadline include any action listed in either Treasury Regulation 301.7508A-1(c)(1) or Revenue Procedure 2018-58. Some of the time-sensitive acts relating to IRAs, employer retirement plans, HSAs and Coverdell ESAs with a due date that falls within these timeframes may include but are not limited to the following transactions.

IRAs

  • Withdraw required minimum distributions
  • Determine an employee’s designated beneficiaries in the year following the employee’s death (certain timing requirements apply)
  • Complete rollovers including an IRA-to-IRA 60-day rollover, a 60-day indirect rollover from an eligible employer plan to an IRA, a rollover within 120 days of a first-time home distribution withdrawn from an IRA that meets certain requirements, and a rollover of a wrongful IRS levy of an IRA or employer retirement plan
  • Use IRA distributions within 120 days of the distribution to qualify for the first-time homebuyer early distribution penalty exception
  • Repay qualified reservist distributions
  • Withdraw substantially equal periodic payments from an IRA
  • Make a qualified disclaimer
  • Certain QLAC transactions
  • Make SEP and SIMPLE IRA contribution for the 2020 tax year
  • Remove an IRA excess contribution with earnings attributable to avoid the 6% excess contribution penalty
  • Recharacterize a Traditional or Roth IRA contribution

HSAs

  • Complete a 60-day HSA-to-HSA rollover

Coverdell ESAs

  • Complete a ESA-to-ESA 60-day rollover

Qualified Plans

  • Make corrective distributions of excess deferrals, excess contributions, and excess aggregate contributions
  • Make timely permissible withdrawals of unwanted deferrals under an eligible automatic contribution arrangement (EACA)
  • File form 5500
  • Make plan loan repayments “quarterly or more frequently”
  • Make an indirect rollover of an eligible rollover distribution (ERD)

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