Tax Byte
IRS Issues Relief for Victims of Hurricane Helene
The Internal Revenue Service has announced comprehensive tax relief for individuals and businesses affected by Hurricane Helene. The IRS has extended tax deadlines for the entire states of Alabama, Georgia, North Carolina, and South Carolina, as well as designated counties in Florida, Tennessee, and Virginia. All taxpayers in these areas now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments.
This extension applies to:
- 2024 individual and business returns normally due in March and April 2025
- 2023 individual and corporate returns with valid extensions
- Quarterly estimated tax payments due on Jan. 15, 2025, and April 15, 2025
- Quarterly payroll and excise tax returns due on Oct. 31, 2024, Jan. 31, 2025, and April 30, 2025
It’s important to note that while the filing deadline for 2023 returns with extensions is postponed, payments for these returns are not eligible for relief as they were due before the hurricane.
Additional areas may be added based on FEMA disaster declarations. Stay informed by regularly checking the Tax Relief in Disaster Situations page on IRS.gov.
Automatic Relief and Penalty Abatement:
The IRS will automatically provide filing and penalty relief to taxpayers with an IRS address of record in the disaster area. However, if a client receives a late filing or payment penalty notice for the postponement period, abatement can be requested by calling the phone number on the notice. This is particularly relevant for clients who may have moved to the affected area after filing their last return.
For clients outside the disaster area who need relief, including those assisting with relief efforts, contact the IRS at 866-562-5227. For bulk requests, consider using the Bulk Requests from Practitioners for Disaster Relief option on IRS.gov.
Claiming Losses and Excluding Income:
Advise clients that they can choose to claim uninsured or unreimbursed disaster-related losses on either their 2024 return (filed in 2025) or their 2023 return (filed this year). They have up to six months after the due date of their 2024 return to make this election. When claiming losses, ensure the FEMA declaration number is included on the return.
Key points to remember:
- Election deadline for individuals: October 15, 2025
- Refer to Publication 547, Casualties, Disasters, and Thefts for detailed guidance
- Qualified disaster relief payments are generally excluded from gross income
- See Publication 525, Taxable and Nontaxable Income for more information on excluded income
Retirement Plan and IRA Considerations:
Clients may be eligible for additional relief related to retirement plans and IRAs. This could include special disaster distributions not subject to the 10% early distribution tax, with the option to spread income over three years. Some may also qualify for hardship withdrawals. Whether or not options like this are available depends on the individual client’s IRA plan.
Additional Resources:
For more detailed information and updates, refer to the following IRS resources:
- Disaster assistance and emergency relief for individuals and businesses
- See the Around the Nation page for state-specific details on payroll and excise tax deposit relief
As we navigate these challenging times, your expertise is crucial in helping clients understand and utilize these relief measures effectively. Stay informed about potential additional relief measures, and don’t hesitate to reach out to the appropriate IRS channels for clarification on these provisions.