The IRS has announced that individuals and businesses in seven states impacted by Hurricane Helene now have until May 1, 2025, to file their tax returns and make payments. This relief applies to taxpayers in Alabama, Georgia, North Carolina, and South Carolina, as well as 41 counties in Florida, eight counties in Tennessee, and six counties plus one city in Virginia.
The IRS also reminds those in federally declared disaster areas who have incurred uninsured or unreimbursed disaster-related losses that they can report these losses on their tax return for the year the loss occurred, or on the return from the previous year. Taxpayers have a six-month window after the due date of their federal return for the disaster year to make this election, regardless of any extensions for filing. For more information, please refer to IRS Publication 547, which covers Casualties, Disasters, and Thefts.
Generally, qualified disaster relief payments are not included in gross income. This means affected taxpayers can exclude from their income amounts received from government agencies for reasonable and necessary personal, family, living, or funeral expenses, as well as costs for home repairs or the replacement of its contents. Additional assistance may be available for those participating in retirement plans or IRAs. For instance, taxpayers might qualify for a special disaster distribution, which would be exempt from the 10% early withdrawal penalty and allow income to be spread over three years.
