ARTICLE | October 03, 2024
Executive summary
IRS postpones various tax filing and tax payment deadlines for hurricane victims located in certain Florida counties. Affected taxpayers will have until May 1, 2025, to file returns and pay any taxes that were originally due during this period.
Filing and payment relief for affected taxpayers in certain Florida counties.
The IRS issued guidance granting relief to taxpayers affected by Hurricane Helene in Florida that began on Sept. 23, 2024. Taxpayers now have until May 1, 2025, to file various individual and business tax returns and make tax payments. The IRS is offering the relief to those in areas designated by the Federal Emergency Management Agency, currently including Taxpayers residing or having a business in Alachua, Bay, Bradford, Calhoun, Charlotte, Citrus, Collier, Columbia, Dixie, Escambia, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hernando, Hillsborough, Holmes, Jackson, Jefferson, Lafayette, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Monroe, Okaloosa, Pasco, Pinellas, Santa Rosa, Sarasota, Sumter, Suwannee, Taylor, Union, Wakulla, Walton and Washington counties. Additional counties may be added at later dates so it is recommended to check the IRS guidance for updated counties.
Affected Taxpayers with returns and payments with due dates postponed until Feb. 3, 2025, due to Tropical Storm Debby in Florida (FL-2024-07) will also now have until May 1, 2025, to file and/or pay. Please note that for areas of the state that received Debby-related relief, but not Helene-related relief, tax deadlines remain Feb. 3, 2025. Currently, this includes 20 counties where the Feb. 3, 2025 deadline remains: Baker, Brevard, Clay, DeSoto, Duval, Flagler, Glades, Hardee, Hendry, Highlands, Lake, Nassau, Okeechobee, Orange, Osceola, Polk, Seminole and Volusia.
Together, the Helene-related and Debby-related declarations permit the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. In this instance, this means that certain deadlines falling on or after Aug. 1, 2024, and before May 1, 2025, are granted additional time to file through May 1, 2025. As a result, affected individuals and businesses will have until May 1, 2025, to file returns and pay any taxes that were originally due during this period.
Affected individuals and businesses will have until May 1, 2025, to file returns and pay any taxes that were originally due during this period. This includes:
- Individuals who had a valid extension to file their 2023 income tax return due to run out on Oct. 15, 2024, but tax payments related to these 2023 returns that were due on April 15, 2024 are not eligible for this relief.
- Businesses with an original or extended due date including, among others, calendar-year corporations whose 2023 extensions run out on Oct. 15, 2024.
- Any individual or business that has a 2024 return normally due during March or April 2025.
Under section 7508A, the IRS gives affected taxpayers until May 1, 2025, to file most tax returns (including individual, corporate and estate and trust income tax returns; partnership returns, S corporation returns and trust returns; estate, gift and generation-skipping transfer tax returns; annual information returns of tax-exempt organizations; and employment and certain excise tax returns), that have either an original or extended due date occurring on or after Sept. 23, 2024, and before May 1, 2025, are granted additional time to file through May 1, 2025.
The May 1, 2025, due date applies to quarterly estimated income tax payments normally due on Sept. 16, 2024, Jan. 15, 2025, and April 15, 2025; quarterly payroll and excise tax returns normally due on Oct. 31, 2024, Jan. 31, 2025, and April 30, 2025. Penalties on payroll and excise tax deposits due on or after Sept. 23, 2024 and before Oct. 8, 2024 will be abated as long as the deposits are made by Oct. 8, 2024.
The IRS relief includes other time-sensitive actions described in Reg. section 301.7508A-1(c)(1) and Rev. Proc. 2018-58, including filing Form 5500 series returns due on or after Sept. 23, 2024 and before May 1, 2025. The IRS relief also applies to transferors who are not affected taxpayers but who are involved in a section 1031 like-kind exchange pursuant to section 17.02(2) of Rev. Proc. 2018-58.
Unless an act is specifically listed in Rev. Proc. 2018-58, the postponement of time to file and pay does not apply. For example, it does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; to Forms 1042-S, 3921, 3922 or 8027; or to employment and excise tax deposits.
Disaster-related casualty losses
In addition to extensions of time to file tax returns and complete certain actions, federal disaster declarations offer taxpayers special options with respect to gain/loss recognition. Taxpayers who experience a casualty loss in a federally-declared disaster area may qualify to recognize losses in the year prior to the year the casualty actually occurred under section 165(i). Taxpayers who realize gains by receiving insurance proceeds in excess of basis may be able to defer gain recognition by reinvesting in qualified property under section 1033. Some of these actions are time sensitive, so taxpayers are encouraged to contact their tax advisor to take advantage of the full range of relief options. Taxpayers that will claim a disaster loss should note in bold letters at the top of their return the FEMA disaster declaration number. For the Sept. 23, 2024 Hurricane Helene in Florida, the designation is 3615-EM.
Please see the applicable news release and refer to Publication 547 and Instructions to Form 4684 Casualties and Thefts for instructions.
Automatic penalty relief
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extending filing, payment or deposit due date falling within the postponement period, the taxpayer or their representative should contact the IRS to have the penalty abated.
Relief for those impacted outside the disaster area
The IRS will also work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Other relief
Qualified disaster relief payments are generally excluded from gross income. 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. Refer to Publication 525 for details.
Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, 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.
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This article was written by Alina Solodchikova, Evan Stone, Marissa Lenius, Jackie Sullivan and originally appeared on 2024-10-03. Reprinted with permission from RSM US LLP.
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