UPDATED – IRS Delays Various Tax Deadlines for Victims of Hurricane Helene and Hurricane Milton by Angie Adames, CPA

2024-10-04

The IRS today is providing tax relief for individuals and businesses affected by Hurricane Helene and Hurricane Milton by extending various tax-filing and tax-payment deadlines to May 1, 2025. The delayed deadline applies automatically to taxpayers with homes or businesses in jurisdictions declared federal disasters by the Federal Emergency Management Agency (FEMA), which includes the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina, as well as the following counties in Tennessee and Virginia:

• Tennessee: Carter, Cocke, Greene, Hamblen, Hawkins, Johnson, Unicoi and Washington counties
• Virginia: Grayson, Smyth, Tazewell, Washington, Wise and Wythe counties and the city of Galax.

The relief also applies to:

• Businesses that do not have operations in the covered disaster areas but do maintain records there;
• Estates and trusts that have records required to meet their tax filing and payment deadlines located anywhere in the affected area;
• Spouses of affected taxpayers who file joint tax returns; and
• Individual relief workers assisting in a covered disaster area, regardless of whether they are affiliated with recognized government or philanthropic organizations.

The tax reporting and payment obligations qualifying for the May 1, 2025, deadline without risk of penalty include:

• Individuals, businesses and tax-exempt organizations with a valid extension to file their calendar-year 2023 federal returns (Tax payments for these returns were due earlier this year and are not eligible for this relief);
• Individuals and businesses with a 2024 tax return filing deadline in March or April 2025;
• 2024 quarterly estimated tax payments typically due Jan. 15, 2025;
• 2025 quarterly estimated tax payments typically due April 15, 2025;
• Quarterly payroll and excise tax returns with original deadlines of Oct. 31, 2024, and Jan. 31 and April 30, 2025;
• Payroll and excise tax deposits whose dates vary from state to state;
• Form 5500 series employee benefit plan annual reports typically required to be filed on or after Oct. 5, 2024, and before May 1, 2025;
• Individuals and businesses located in Florida, South Carolina and portions of Georgia that were impacted by Hurricane Debby in August and subsequently received a filing extension to Feb. 3, 2025; and
• Certain time-sensitive actions that must have been performed on or after Oct. 5, 2024, and before May 1, 2025, including the 45- and 180-day deadlines for taxpayers involved in 1031 exchanges to identify and complete acquisitions of replacement property.

Should affected taxpayers receive a late filing or late payment penalty notice from the IRS for an original tax filing, payment or deposit due date that falls within the postponement period, they should call the telephone number on the notice to have the IRS abate the penalty.

Taxpayers located in the covered disaster areas may also qualify to withdraw up to $22,000 penalty-free from their 401(k) plans and individual retirement accounts (IRAs). The amount is treated as taxable income to the account owner. Individuals may include the amount distributed in their gross income over a three-year period; they may also repay the amount distributed back into the qualified plan or IRA at any time within a three-year period.

Covered taxpayers who incur disaster-related casualty losses due to Hurricane Helene may claim those amounts on their 2023 or 2024 federal income tax returns. Generally, qualified disaster relief payments are 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.

About the Author: Angie Adames, CPA, is a director of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she provides tax and consulting services to real estate companies, manufacturers and closely held entities. She can be reached at the CPA firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.

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