The Internal Revenue Service released guidance Wednesday to give tax relief to residents of Puerto Rico and the U.S. Virgin Islands who have evacuated the islands or were unable to return because of Hurricanes Irma or Maria.
The relief extends the typical 14-day absence period to 117 days (starting Sept. 6, 2017 and ending December 31, 2017) for the presence test for residency under the tax rules. Someone who is absent from either U.S. territory on any day during this 117-day period will be treated as leaving or unable to return to the territory as a result of Hurricanes Irma and Maria on that day.
There are some exceptions to the general 183-day presence test, the IRS pointed out. They require individuals to be in the location where they claim residence for 183 days during the tax year. Generally, residents can include up to 14 days within the 183-day period because of a declared disaster.
Nevertheless, because of the catastrophic damage caused by the monster storms to Puerto Rico and the U.S. Virgin Islands, the Federal Emergency Management Agency issued Notices of a Presidential declaration of a major disaster for both territories. In Notice 2017-56, which the IRS issued Wednesday, the agency extended that 14-day period to 117 days.
Publication 570 includes an explanation of the presence test for residents of U.S. territories such as Puerto Rico and the U.S. Virgin Islands.
Notice 2017-56 offers relief to residents of Puerto Rico and the U.S. Virgin Islands who evacuated or couldn’t return because of Hurricanes Irma or Maria. Most individuals can otherwise lose their status as “bona fide residents” of Puerto Rico or the U.S. Virgin Islands for tax filing and reporting purposes. Notice 2017-56 extends the usual 14-day absence period to 117 days, beginning Sept. 6, 2017 and ending Dec. 31, 2017, for the presence test for residency under the tax rules. An individual who is absent from either U.S. territory on any day during the 117-day period will be treated as leaving or being unable to return to the relevant U.S. territory as a result of Hurricane Irma and Maria on that day.
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