How a major disaster can affect your tax obligations

Sep 08, 2021

This information was first published by the IRS and has been reproduced with permission. Subscribe to IRS tax tips here.

Victims of Hurricane Ida now have until January 3, 2022, to file various individual and business tax returns and make tax payments

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, as well as certain counties in New Jersey and New York. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. However, because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.

The January 3, 2022, deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021.

No matter the type of disaster or how devastating it is, before the IRS can choose to authorize tax relief, the Federal Emergency Management Agency must issue a major disaster declaration. Generally, the IRS will authorize disaster tax relief to all areas identified on a major disaster declaration if FEMA identifies at least one area qualifying for their Individual Assistance program.

The IRS gives taxpayers more time to file and pay.

Taxpayers whose address of record is in an area qualifying for IRS disaster tax relief will automatically receive extra time from the IRS to file returns and pay taxes. The IRS's disaster assistance page provides disaster updates and links to resources. Information is usually available on the IRS Twitter account as well. Taxpayers can also call the agency's disaster line at 866-532-5227 with questions.

Taxpayers can qualify for a casualty loss tax deduction.

People who have damaged or lost property due to a federally declared disaster may qualify to claim a casualty loss deduction. They can claim this on their current or prior-year tax return. This may result in a larger refund.

People can apply for a disaster loan or grant.

The Small Business Administration offers financial help to business owners, homeowners and renters. This help is for those in a federally declared disaster area. To qualify, a taxpayer must have filed all required tax returns.

Taxpayers might need a tax return transcript.

People who need a tax transcript to support their disaster claims can obtain free transcripts by using Get Transcript to access their transcripts immediately online or to request mail delivery. They can also call 800-908-9946 to request mail delivery or submit Form 4506-T, Request for Transcript of Tax Return.

People who need a copy of their tax return, should file Form 4506, Request for Copy of Tax Return. The IRS waives the usual fees and expedites requests for copies of tax returns for people who need them to apply for disaster-related benefits or to file amended returns claiming disaster-related losses. If filing Forms 4506-T or 4506, the taxpayer should state on the form the request is disaster related and list the state and type of event. This helps speed up the process.

People who relocate need to submit a change of address.

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.

The IRS encourages affected taxpayers to review all federal disaster relief at DisasterAssistance.gov.