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IRS provides Hurricane Milton relief; May 1 deadline now applies to individuals and businesses in all of Florida; many businesses qualify for deposit penalty relief

Posted on Oct 11, 2024 in Nuts & Bolts

The Internal Revenue Service today announced relief for individuals and businesses in 51 counties in Florida due to Hurricane Milton.

Individuals and businesses in six counties that previously did not qualify for relief under either Hurricane Debby or Hurricane Helene will receive disaster tax relief beginning Oct. 5, 2024, and concluding on May 1, 2025. They are Broward, Indian River, Martin, Miami-Dade, Palm Beach, and St. Lucie.

In addition, individuals and businesses in 20 counties previously receiving relief under Debby but not Helene will receive disaster tax relief under Hurricane Milton from Aug. 1, 2024, through May 1, 2025. They are Baker, Brevard, Clay, DeSoto, Duval, Flagler, Glades, Hardee, Hendry, Highlands, Lake, Nassau, Okeechobee, Orange, Osceola, Polk, Putnam, Seminole, St. Johns, and Volusia counties.

As a result, affected taxpayers in all of Florida now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments, including 2024 individual and business returns normally due during March and April 2025 and 2023 individual and corporate returns with valid extensions and quarterly estimated tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Individuals and households that reside or have a business in any one of the localities listed above qualify for tax relief. The current list of eligible localities is always available on IRS.gov’s Tax Relief in Disaster Situations page on IRS.gov.

Filing and payment relief 

Hurricane Milton-related tax relief postpones various tax filing and payment deadlines that occurred beginning on Oct. 5, 2024, and ending on May 1, 2025 (postponement period). 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.

This means, for example, that the May 1, 2025, deadline now applies to:

  • Any individual or business with a 2024 return is normally due in March or April 2025.
  • Any individual, C corporation, or tax-exempt organization with a valid extension can file their calendar year 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the hurricane occurred.
  • 2024 quarterly estimated tax payments are normally due on Jan. 15, 2025, and 2025 estimated tax payments are normally due on April 15, 2025.
  • Quarterly payroll and excise tax returns are normally due on Oct. 31, 2024, Jan. 31, 2025, and April 30, 2025.

In addition, for localities affected by Hurricane Milton, penalties for failing to make payroll and excise tax deposits due on or after Oct. 5, 2024, and before Oct. 21, 2024, will be abated as long as the deposits are made by Oct. 21, 2024. Localities eligible for this relief are Alachua, Baker, Bradford, Brevard, Broward, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Gilchrist, Glades, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lafayette, Lake, Lee, Levy, Madison, Manatee, Marion, Martin, Miami-Dade, Monroe, Nassau, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putman, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Suwannee, Taylor, Union and Volusia counties.

Deposit penalty relief and other relief were previously provided to taxpayers affected by Debby and Helene. For details, see the Florida page on IRS.gov. The Disaster Assistance and Emergency Relief for Individuals and Businesses page also has details and information on other returns, payments, and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to taxpayers with an IRS address of record in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible that an affected taxpayer may not have an IRS address of record located in the disaster area because they moved to the disaster area after filing their return. In these unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records are necessary to meet a deadline occurring during the postponement period and are located in the affected area. Taxpayers qualifying for relief living outside the disaster area must contact the IRS at 866-562-5227. This also includes workers affiliated with a recognized government or philanthropic organization who assist in relief efforts. Disaster area tax preparers with clients outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov.

Additional tax relief 

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2024 return normally filed next year) or the return for the prior year (the 2023 return filed this year). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2025. Be sure to write the FEMA declaration number – 3622-EM – on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, 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. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers participating 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, allowing 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 its participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Reminder about tax return preparation options

  • MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.

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