IRS provides tax relief to victims of wildfires and severe storms in Washington, Arizona, and Illinois

The IRS has announced tax relief for individuals and businesses affected by various natural disasters in Washington, Arizona, and Illinois.

This relief extends the filing and payment deadlines for those impacted by wildfires and severe storms, providing critical support during challenging times.

Wildfire and storm-affected areas

The tax relief applies to individuals and businesses located in specific disaster-declared areas, as designated by the Federal Emergency Management Agency (FEMA).

Affected regions include:

• Washington state: The Confederated Tribes and Bands of the Yakama Nation, impacted by wildfires beginning June 22, 2024.
• Arizona: The San Carlos Apache Tribe, affected by the Watch Fire that began July 10, 2024.
• Illinois: Various counties, including Cook, Fulton, Henry, St. Clair, Washington, Will, and Winnebago, impacted by severe storms and flooding that began July 13, 2024.

The IRS relief extends to any additional areas FEMA may designate as disaster zones. Affected taxpayers will automatically qualify for relief.

Filing and payment relief for disaster victims

The tax relief postpones various tax filing and payment deadlines that occurred between June 22, 2024, and February 3, 2025.

Affected individuals and businesses will now have until February 3, 2025, to file their returns and pay taxes due during this period.

Key deadlines impacted by the extension:

• Federal tax returns for 2023: Individuals, businesses, and tax-exempt organizations with valid extensions for filing their 2023 federal tax returns are eligible for the new February 3, 2025, deadline. However, any tax payments due for these returns (previously required by April 15, 2024) do not receive an extension.
• Quarterly estimated income tax payments: Payments due on September 16, 2024, and January 15, 2025, are included in the relief.
• Quarterly payroll and excise tax returns: Deadlines previously set for July 31, October 31, 2024, and January 31, 2025, are also extended.

Penalty abatements

• Washington: Penalties for failing to make payroll and excise tax deposits due between June 22, 2024, and July 8, 2024, will be waived, provided the deposits were made by July 8.
• Arizona: Penalties for failing to make payroll and excise tax deposits due between July 10, 2024, and July 25, 2024, will be waived, as long as deposits were made by July 25.
• Illinois: Penalties for payroll and excise tax deposits due between July 13, 2024, and July 29, 2024, will be waived if deposits were made by July 29.

Special considerations for disaster-related losses

Taxpayers in federally declared disaster areas can claim uninsured or unreimbursed disaster-related losses on either their 2024 or 2023 federal tax returns.

Claiming these losses on a prior year’s return can provide a faster refund, offering financial support during recovery efforts.

How to claim disaster losses

Taxpayers must include the FEMA declaration number on the return when claiming losses:

• Washington (Yakama Nation): DR-4823
• Arizona (San Carlos Apache Tribe): DR-4833
• Illinois: DR-4819

For more details on how to claim disaster losses, refer to Publication 547, "Casualties, Disasters, and Thefts."

Additional disaster relief options

Qualified disaster relief payments

Certain qualified disaster relief payments can be excluded from gross income. These include amounts received for personal, family, living, or funeral expenses, as well as for home repairs or rehabilitation.

For more details, see Publication 525, "Taxable and Nontaxable Income."

Retirement plan and IRA relief

Affected taxpayers may be eligible for special disaster distributions from retirement plans or IRAs without incurring the additional 10% early distribution tax. These distributions can be spread over three years.

Additionally, hardship withdrawals may be available, depending on the specific plan's rules.

Automatic IRS relief and how to get help

The IRS will automatically provide filing and penalty relief to taxpayers with an IRS address of record in the disaster areas. These taxpayers do not need to take any additional steps to receive this relief.

However, if a taxpayer receives a late filing or payment notice, they should contact the IRS to have the penalty abated.

If affected taxpayers live outside the disaster area but have records located within the disaster zone, they may also qualify for relief. These individuals can contact the IRS at 866-562-5227 for assistance.

Our professional help

We understand how challenging it can be to navigate tax filings after a natural disaster.

That's why our experienced team of CPAs / EAs is here to provide personalized assistance to ensure you meet all your tax obligations accurately and on time

Here’s how we can help:

• Expert guidance: Our team specializes in disaster-related tax relief and can help you take advantage of every benefit available, from extended deadlines to disaster loss claims.
• Comprehensive support: We handle all aspects of your tax filings, including quarterly payments, payroll tax deposits, and any specific relief programs that apply to your situation.
• Hassle-free filing: With our help, you won’t need to worry about the complexities of forms, deadlines, or appeals. We take care of everything for you.
• Peace of mind: Rest easy knowing your tax return is handled by professionals who stay up-to-date with IRS disaster relief guidelines.

Don’t leave your tax filings to chance. Get professional help with your disaster-affected tax situation and ensure you're making the most of the relief options available to you.

Bottom line

The IRS's tax relief for victims of wildfires and severe storms provides much-needed support for affected individuals and businesses in Washington, Arizona, and Illinois.

If you are impacted, be sure to take advantage of the extended deadlines, penalty waivers, and other available relief measures.

For the latest updates and guidance, visit the IRS disaster relief page or consult a tax professional.