State lawmakers unanimously approved HB 149, the Disaster Recovery Act of 2024, a bill that appropriates $273 million to help communities in Western North Carolina recover from the devastation of Hurricane Helene. NCACPA successfully lobbied legislators to include important tax relief in the measure for individuals and businesses impacted by the storm.
TAXED PTE ELECTION DEADLINE EXTENDED
The bill extends the deadline for S corporations and partnerships to make a Taxed Pass-Through Entity election for tax year 2023. An election will be considered timely on an annual return due after Sept. 25, 2024, and before May 1, 2025, if the election is made on a return filed on or before May 1, 2025. This applies to all PTEs, regardless of whether they are located in the declared disaster area or not.
INTEREST WAIVED
Other tax provisions are limited to taxpayers and businesses located in a county declared a major disaster area by President Biden as a result of Hurricane Helene (see map) and Nash County:
- Section 13.1(a) authorizes the Secretary of Revenue to waive the accrual of interest from Sept. 25, 2024, through May 1, 2025, on an underpayment of tax imposed on a franchise, corporate income, or individual income tax return, including a partnership and estate and trust tax return.
- Section 13.1(b) authorizes the Secretary of Revenue to waive the accrual of interest for an underpayment of state, local, or transit sales and use taxes, as follows:
- For an underpayment of tax due on a quarterly return for the third calendar quarter of 2024, the amount of interest accrued from Oct. 31, 2024, through Nov. 30, 2024, so long as the payment is made on or before Nov. 30, 2024.
- For an underpayment of tax due on a monthly return for September 2024, the amount of interest accrued from Oct. 20, 2024, through Nov. 20, 2024, so long as the payment is made on or before Nov. 20, 2024.
- For an underpayment of tax due on a monthly return for October 2024, the amount of interest accrued from Nov. 20, 2024, through Dec. 20, 2024, so long as the payment is made on or before Dec. 20, 2024.
- Section 13.1(c) authorizes the Secretary of Revenue to waive the accrual of interest for an underpayment of withheld taxes—excluding taxpayers under G.S. 105-163.6(d)—as follows:
- For an underpayment of tax due on a quarterly return for the third calendar quarter of 2024, the amount of interest accrued from Oct. 31, 2024, through Nov. 30, 2024, so long as the payment is made on or before Nov. 30, 2024.
- For an underpayment of tax due on a monthly return for September 2024, the amount of interest accrued from Oct.15, 2024, through Nov. 15, 2024, so long as the payment is made on or before Nov. 15, 2024.
- For an underpayment of tax due on a monthly return for October 2024, the amount of interest accrued from Nov. 15, 2024, through Dec. 15, 2024, so long as the payment is made on or before Dec. 15, 2024.
NON-TAX PROVISIONS
The vast majority of funding in the bill will be used as a state match for federal disaster assistance. The bill also funds a revolving loan program to assist local governments with cash-flow issues as they await federal reimbursement for disaster-related expenses. Speaker of the House Tim Moore and Senate President Pro Tempore Phil Berger said that this bill is only the start of the state’s financial commitment to the recovery effort.
WHAT’S NEXT
The NCACPA Advocacy team alerted lawmakers to the fact that interest waivers in HB 149 do not extend relief to taxpayers located outside the declared disaster area whose tax preparer or tax records are located inside the declared disaster area. We are working with legislators and their staff to address this issue when the General Assembly reconvenes on Oct. 24 to consider a second round of disaster relief.
If you are a tax preparer in the disaster area and have clients outside the disaster area, NCACPA wants to share this information with lawmakers. Please email your story to Director of Advocacy Robert Broome, CAE.