Recently, Hurricane Helene made landfall in Florida as a powerful Category 4 hurricane, causing widespread devastation throughout the region. With over 130 reported deaths and hundreds still missing, the storm resulted in significant flooding and power outages across Florida and even extending to the Appalachian mountains. The recovery process is expected to be slow due to the extensive damage caused by the hurricane.
In response to the aftermath of Hurricane Helene, the Internal Revenue Service (IRS) has announced tax relief measures for individuals and businesses affected by the storm. The relief measures apply to the entire states of Alabama, Georgia, North Carolina, and South Carolina, as well as parts of Florida, Tennessee, and Virginia. Affected taxpayers in designated areas will have an extended deadline until May 1, 2025, to file various federal individual and business tax returns and make tax payments.
The tax relief provided by the IRS applies to all counties in Alabama, Georgia, North Carolina, South Carolina, certain counties in Tennessee and Virginia, as well as specific counties in Florida. The IRS will also extend relief to additional counties and states later as needed. Taxpayers in the disaster area will benefit from the extended deadline to file returns and pay taxes that were originally due during the period affected by the hurricane.
Individuals, businesses, and tax-exempt organizations who have a valid extension to file their 2023 federal return can now benefit from the extended deadline until May 1, 2025. However, payments on these returns that were due before the hurricane occurred are not eligible for the extended deadline. Additionally, various quarterly estimated income tax payments, payroll, and excise tax returns deadlines have all been extended until May 1, 2025, for affected taxpayers.
Penalties for failing to make payroll and excise tax deposits will be abated for affected taxpayers in different states. The periods for relief vary depending on the state, with deadlines ranging from late September to early October. The disaster assistance and emergency relief for individuals and businesses page on IRS.gov provides detailed information on other returns, payments, and tax-related actions eligible for relief during the extension.
Taxpayers residing in the disaster area with an IRS address of record will receive automatic filing and penalty relief. Those who do not have an IRS address in the affected area but are entitled to relief should contact the IRS to have penalties abated. Taxpayers living outside the disaster area but with records necessary to meet deadlines during the postponement period should also contact the IRS for assistance.
Individuals and businesses in a federally declared disaster area are eligible to claim a casualty loss deduction for losses caused by Hurricane Helene. However, casual loss deductions are not available for most taxpayers until 2025, except for those in a disaster area. Taxpayers seeking assistance in claiming disaster losses should consult their tax professional, as free help may be available. Additionally, insurance coverage should be utilized before seeking FEMA assistance for losses already covered.
Qualified disaster relief payments received by affected taxpayers are generally excluded from gross income, allowing individuals to exclude funds received for personal, family, living, or funeral expenses, as well as home repair or replacement from their income. Additional relief may be available for taxpayers participating in retirement plans or IRAs, such as special disaster distributions without early distribution tax penalties. The IRS disaster assistance page provides further information on relief options available during the postponement period.
