Debbie Alexander | Carr, Riggs & Ingram
When disaster strikes, the immediate focus is recovery—repairing property, safeguarding livelihoods, and supporting families. But for many taxpayers, navigating tax deadlines during these times adds another layer of stress. Until recently, IRS relief couldn’t begin until a federal disaster declaration was issued, often creating delays and uncertainty.
That’s about to change. The Filing Relief for Natural Disasters Act (H.R. 517) recently passed by Congress and signed into law, empowers the IRS to act more quickly—as soon as a state declares a disaster or emergency. For individuals and business owners in affected areas, this law offers timely support, providing clarity and flexibility when it’s needed most.
What the Law Changes
Previously, the IRS had to wait for a federal disaster declaration before it could extend tax deadlines. Under this new law, the agency can now respond to qualified state-level disaster declarations, giving affected taxpayers additional time to manage critical tax obligations sooner.
Key provisions of the legislation include:
Faster Access to Relief: State governors, along with leaders in the District of Columbia, Puerto Rico, and U.S. territories, can now formally request IRS deadline extensions following a declared disaster or emergency—without waiting for a federal declaration.
Extended Deadlines: The IRS may postpone filing and payment deadlines, as well as timelines for responding to IRS notices, making retirement contributions, electing certain tax treatment, or addressing tax assessments and collections.
More Time for Certain Taxpayers: The automatic extension for relief workers, taxpayers killed or injured in federally declared disasters, and individuals and businesses with primary residences, primary business locations, or records in disaster areas increases to 120 days (up from 60).
Qualifying Events: Eligible disasters include natural catastrophes, fires, floods, and explosions causing significant damage that prompt a state-level request for federal tax deadline relief.
What This Means for Taxpayers
For individuals and businesses in disaster-affected areas, this law provides earlier clarity and flexibility around tax obligations, giving you more time to focus on recovery without the added pressure of looming tax deadlines.
If your home, primary business location, or tax records are in a declared disaster area, the IRS can now act more quickly to extend filing and payment deadlines. This added flexibility can ease immediate pressures, but relief is not automatic—states must first request IRS action, and specific guidance will follow.
In many cases, you may still need to take proactive steps to qualify for available relief, such as carefully tracking casualty losses, documenting damages, and reassessing estimated tax payments to reflect your changed circumstances.
Steps to Take if You’re Affected
If you’re in an area impacted by a declared disaster or emergency:
- Watch for IRS Announcements: Monitor official IRS notices confirming deadline extensions for your area.
- Maintain Detailed Records: Keep documentation of property damage, repair costs, and business disruption to support any future tax relief claims.
- Coordinate with Your Advisor: Some tax elections or deductions may be time-sensitive following a disaster, and understanding updated deadlines can help you avoid penalties or missed opportunities.
- Plan Ahead: If you frequently operate in disaster-prone areas, review your recordkeeping and contingency plans now to help simplify future relief requests.
A Step Toward Faster Relief
The passage of this act aims to make the tax process a little less burdensome during already difficult times. Faster access to deadline extensions helps reduce stress and provides flexibility when you need it most.
If your area has been affected by a recent disaster or state-declared emergency, contact your CRI advisor to review your eligibility for relief and build a proactive tax response plan tailored to your situation. We can help you understand how this new law applies to your situation, take advantage of available relief, and make informed decisions as you recover.