Hurricane Helene and Milton IRS Relief | Foodman CPAs & Advisors

Last updated: 2024/10/30 at 7:21 PM

On 10/11/24, the IRS announced that it is ready to provide tax assistance for taxpayers affected by Hurricane Helene and Milton that devastated Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Tennessee and Virginia. Assistance applies to individuals and businesses.

IRS the tax-related assistance for taxpayers that need to recover from Hurricane Helene and Milton. The IRS announcement states that Disaster victims should note the following excerpts:

More time to file and pay. IRS automatically gives taxpayers whose address of record is in a disaster-area locality more time to file returns and pay taxes. Taxpayers get the extra time without having to ask for it. Taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Tennessee and Virginia, who received extensions to file their 2023 returns have until May 1, 2025, to file. Tax-year 2023 tax payments are not eligible for this extension. In addition, May 1 is also the deadline for filing 2024 returns and paying any tax due.
Disaster payments usually tax-free. Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents.
Retirement plan help. Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). A taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.
Disaster loss deduction may be available. In some instances, individuals and businesses in a federally-declared disaster area can qualify for a casualty loss tax deduction. The deduction is available for damaged or destroyed property not covered by insurance or other reimbursement and can result in a larger refund. A unique feature of this deduction is that taxpayers can choose to claim it on either the return for the year the loss occurred (in this instance, the 2024 return normally filed next year), or the return for the prior year (the 2023 return filed this year). For individual taxpayers, the deadline for making this election is Oct. 15, 2025. If deductions exceed a taxpayer’s income, it can result in a net operating loss (NOL). A taxpayer need not have a business to have a NOL from a casualty. A NOL can normally be carried forward and deducted in a future tax year.
Free tax transcripts available. The IRS reminds anyone whose tax records were lost or destroyed, or who needs tax records to apply for disaster assistance that they can get a free transcript of their returns from the IRS. Immediate access to these transcripts is available through the Get Transcript link on IRS.gov. Alternatively, taxpayers can use Get Transcript to request that transcripts be mailed to them. They can also call 800-908-9946 to request mail delivery or submit Form 4506-T, Request for Transcript of Tax Return. As a reminder, taxpayers must have filed all required tax returns in order to qualify for disaster loans or grants for business owners, homeowners and renters from the Small Business Administration.
Free copy of tax return. Disaster-area taxpayers can get a free copy of their tax return by filing Form 4506, Request for Copy of Tax Return. The IRS waives the usual fees and expedites requests for copies of returns for people who need them to apply for disaster-related benefits or to file amended returns claiming disaster-related losses. To speed processing, be sure to note that this is a disaster-related request and list the state and type of event.
Address change. After a disaster, people might need to temporarily relocate. Those who move should notify the IRS of their new address by submitting Form 8822, Change of Address.