IRS disaster relief: Tax extension dates and disaster preparedness tips

Editor’s note: The IRS disaster tax relief has been announced for individuals and businesses affected by hurricanes Helene and Milton, and wildfires in southern California. See below for deadline extension details.

Hurricanes, floods, tornadoes, ice storms, wildfires, and other severe weather can do major damage to your home and business. If a disaster strikes and damages your home or business, you’ll want to know what to do now and in the coming weeks to tap into IRS tax relief. 

Also, if you’re looking to safeguard your important documents before a disaster happens, we’ve outlined four simple steps you can take now to help you with disaster preparedness.

Getting disaster relief from the IRS and your taxes

Special provisions in tax law might help affected taxpayers recover financially after a disaster situation. This especially applies if the president declares your location a major disaster area. Depending on the timing of the disaster, you may also qualify for a disaster tax extension to file and pay your taxes.

Additionally, when the disaster occurred will determine the casualty loss rules that apply to your situation. Read on as we cover disaster tax extension dates for recent incidents as well as an overview of the rules for claiming a casualty loss.

IRS disaster relief 2024-2025 and disaster tax extension areas

Below we’ve listed IRS tax return disaster relief information for a few recent natural disasters. For a comprehensive list of IRS disaster relief by state, please check the IRS website.

2024 disaster tax extensions (IRS hurricane relief)

The Internal Revenue Service announced individuals and businesses affected by Hurricanes Helene and Milton qualify for disaster tax relief, including tax extensions. Affected taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Alaska, New Mexico, Tennessee, Virginia and West Virginia:

• You now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments. The extensions are generally automatic, meaning you don’t have to submit a request for more time.
• This includes
  • 2024 individual, and business returns normally due during March and April 2025,
  • 2023 individual and corporate returns with valid extensions (for disasters occurring before the October 15 deadline), and
  • quarterly estimated tax payments due after the disaster and before May 1, 2025.

You can also find additional details about IRS gov disaster tax relief due to Hurricane Helene, Hurricane Milton or all other recognized disaster situations. 

2025 disaster tax extensions (California wildfires tax relief)

The IRS announced California wildfire tax relief for individuals and businesses in southern California affected by wildfires and straight-line winds. Individuals and households that reside in or have a business in Los Angeles County qualify for tax relief. However, the same relief will be available to any other counties added later to the disaster area.

Taxpayers in the affected county/counties:

• You now have until Oct. 15, 2025, to file various federal individual and business tax returns and make tax payments. The extensions are generally automatic, meaning you don’t have to submit a request for more time.
• This includes:
  • 2024 individual, and business returns normally due in March and April 2025, and
  • quarterly estimated tax payments due after the disaster and before Oct. 15, 2025.

Claiming IRS tax relief in disaster situations

Aside from more time to file and pay taxes, one key way the IRS provides disaster relief is through a tax deduction of your casualty loss. To determine the amount of loss you can claim, you must follow a formula based on rules applicable to the time frame of the disaster.

Initially, the steps are the same regardless of the timeframe.

First, determine your starting number. Your starting loss amount is based on the lower of these two numbers:

• Property’s adjusted basis prior to the casualty. The property’s adjusted basis is usually the price paid for the property plus any improvements.
• Property’s decline in market value caused by the disaster. In some cases, you can determine this by repair costs.

Then reduce the number above by the amount of insurance and other nontaxable reimbursements.

Next, you’ll need to know which rules to follow—either the rules for personal disaster losses from a federally declared disaster, or the rules for qualified disaster losses. This will determine if you should reduce your loss amount by $500 or $100—and if you should further reduce it by 10% of your AGI.

Additionally, if your loss is a qualified disaster loss, you may also choose to claim the standard deduction and the loss as an additional standard deduction (otherwise you may only claim the loss if you itemize deductions).

See the table and examples below for additional details on the difference between the rules.

Take note: Form 4684 will help walk you through the steps above. You’ll also include this form when you file your return.

Federal Disaster Tax Relief Act impacts to claiming a loss

In Dec. 2024, the Federal Disaster Relief Act of 2023 was signed into law. With this new rule, eligibility to claim a disaster loss will depend on several factors, including when the disaster incident occurred.

IRS Disaster Relief Examples

Taylor’s home in North Carolina was damaged by Hurricane Helene, a major disaster eligible for IRS tax relief. Her home’s adjusted basis is $350,000 and its value dropped by $50,000 due to the storm. After receiving an insurance payout of $39,500 and accounting for the loss limit of $500, Taylor’s deductible loss is $10,000.

That math looks like this: $50,000 – ($39,500+$500) = $10,000 (deductible loss)

Although normally not deductible because it’s less than 10% of her $120,000 AGI, Taylor has a qualified disaster loss and the 10% rule for personal disaster losses is waived.

If the same situation happened in LA County with the 2025 California wildfires, Taylor’s loss would not be deductible. Even though the wildfires were declared a major disaster, they don’t fall within the Federal Disaster Tax Relief Act (FDTR) timeframe, so the 10% AGI requirement isn’t waived. Therefore, the loss would be less than 10% of her AGI and non-deductible.

Additional timing considerations for disaster assistance

If you live or own a business in a federally declared disaster area eligible for public or individual assistance (or both), you may get a faster refund by claiming losses related to the disaster on your previous year’s return. Do this by filing an amended return. If it makes more sense for your current financial or tax situation, you can deduct a loss on your current-year return.

Additional IRS disaster tax relief considerations for federally declared disaster areas:

• You have up to four years after the close of the first year in which any gain was realized to replace your principal residence or pay tax on the gain.
• You might have tax filing and payment deadlines postponed for a time specified by the IRS (as noted above). Any interest that normally would apply to late payments may be waived in this situation.

IRS disaster tax relief checklist and tips

In the days and weeks after a disaster, figuring out what it means for your taxes is probably one of the last things on your mind. To help you start to take the steps towards claiming a casualty loss deduction, we’ve created the following checklist and tips.

Disaster checklist

• Take photographs to document damage to your property or belongings. This will be helpful in calculating the amount of your loss. You might also benefit if you take photos showing the condition of the property after it’s restored or replaced.
• Keep your receipts. Certain expenses might be deductible, and they could be helpful in determining your loss. Receipts for contracting work can show how much you lost and confirm the use of insurance reimbursements (see below).
• Recreate your records. You may need financial records to support your insurance claims, tax filings and other paperwork. The IRS can help you recreate your tax records and will even waive fees to do so (see below). For property such as your home or car, contact your bank. You may also be able to get records on historical purchases from your credit card company.  
• Replace property with similar property to avoid paying taxes on any gain from insurance payments. However, replacement property doesn’t have to match item-for-item. Insurance payments for the home and its contents are from a common pool of funds. So, you can spend more money replacing the house than on replacing its contents, or vice versa. If you qualify, you might be able to postpone a gain related to a personal residence. This applies if you use the insurance reimbursement to repair or replace your home.
• File your insurance claim as soon as possible. This is important since you must subtract any reimbursement when calculating your loss.
• Determine if you can claim a casualty loss on your return. There are two sets of rules around eligibility to claim a loss. You’ll know which guidelines apply to your situation based on when the disaster occurred. See the section called “Federal Disaster Tax Relief Act impacts to claiming a loss” above for details.
• Lean on the expertise at H&R Block to help you understand what you can claim on your return and any tax deadline impacts.

What assistance is taxable? And what counts towards your casualty loss?

As you consider financial transactions associated with a disaster, you may wonder what the impacts are of various payments and costs may have on your taxes. 

• Food, medical supplies, and other forms of disaster assistance aren’t taxable. These items also don’t reduce the amount you can claim as a loss unless they replace lost or destroyed items.
• Reimbursements for losses aren’t taxable unless you receive more for the property than its basis. The basis is the original cost plus the cost of improvements. Even if the reimbursement is more than the basis, you don’t have to pay tax currently if both of these apply:
  • You replace lost, damaged, or destroyed items.
  • You replace the items within:
    • Two years after the end of the first tax year when any part of the gain on conversion is realized
    • Three years for real property used for business or held for investment
    • Four years if the property is a main home in a federally declared disaster area
• You can’t consider the cost of cleaning up or making repairs part of your casualty loss. However, you can use the cost for repairs as a basis to determine the decrease in fair market value (FMV).

Other tax relief in disaster situations: Waived fees for transcripts

A tax transcript is a document that shows most of the line items from your return. It may be helpful in rebuilding your records or supporting an insurance claim.  If you need copies or transcripts of your federal return, the IRS will waive any fees and expedite your request.

You can use the IRS Get Transcript Tool or one of these forms to request a transcript of your federal return:

• Form 4506-T: Request for Transcript of Tax Form
• Form 4506T-EZ: Short Form Request for Individual Tax Return Transcript

You can also use Form 4506-T to request transcripts of W-2s and 1099s and account information — like payment of estimated taxes.

If you need greater detail on prior returns than is provided by transcripts, you can request a photocopy of a prior return and any attachments by submitting Form 4506: Request for Copy of Tax Form.

You can obtain these forms:

• By calling the IRS toll-free disaster hotline at 866-562-5227
• At www.irs.gov

Disaster preparedness: What to do before disaster strikes

Disasters can strike at any time and when it happens, you’ll have a lot on your mind. If you’re able to find time to safeguard your financial records before an event occurs, you’ll thank yourself later.

The IRS suggests you take these steps to protect your documents from natural disaster:

• Create a backup set of records electronically. Keep a copy of your records in a safe place that’s stored away from the original set. And, be sure to update your information regularly so the records are accurate. Records that should be backed up include:
  • Bank statements
  • Tax returns and records
  • Insurance policies
• Document your valuables. Photograph or videotape the contents of your home, especially to document valuable possessions. A photographic record can help you prove the market value of items for insurance and casualty-loss claims. Store the photos or video with a friend or family member who lives outside the area.
• Review and update your emergency plans annually. If you’re an employer, update emergency plans when you hire new employees or when your organization changes functions.
• Check on fiduciary bonds. If you’re an employer and you use a payroll service, ask the provider if it has a fiduciary bond in place. That bond could protect you in the event of default by the payroll-service provider.

Need help navigating IRS disaster relief and your taxes? We’re here to help

No matter what way you file your taxes, we can help with how to claim disaster relief on your taxes.