After Hurricane Helene caused a lot of damage, the Internal Revenue Service (IRS) set up a number of tax relief programs to help people and businesses in the areas that were impacted.
Many states are helping with this, like Alabama, Georgia, North Carolina, and South Carolina, as well as parts of Florida, Tennessee, and Virginia.
These plans are meant to help people and businesses deal with the financial effects of the disaster without having to borrow as much.
People who are eligible and live in disaster zones will have until May 1, 2025 to finish their federal tax returns and pay their taxes as part of these tax relief provisions. A lot of tax forms and payments have an extended due date.
This includes government returns for individuals and businesses for fiscal year 2024, which would normally be due in March and April 2025.
Also, taxpayers who got legal extensions for their 2023 forms and those who have to make quarterly estimated tax payments would gain from the longer deadline.
Reasons for the IRS extension
These tax breaks were based on disaster statements made by the Federal Emergency Management Agency (FEMA).
With these designations, the IRS can help places that were badly damaged by the storm, and the agency has promised to do the same for any other places that may face similar problems in the future.
These payments are automatically sent to taxpayers whose main home on file with the IRS is in the disaster areas. If a person has recently moved but has not updated the IRS with their new address, they may still get mail about penalties.
If this happens, taxpayers should call the IRS right away to get any fines waived. In addition, taxpayers who have important tax records in crisis zones but do not live there can get their money back.
People in this position can get help by calling the IRS disaster assistance hotline.
In response to the fact that many people lost a lot of money because of Hurricane Helene, the IRS has made it possible for taxpayers to claim losses linked to the hurricane.
People who have lost money must not have had their losses covered by insurance or been paid. They can claim these losses on either their 2024 or 2023 tax returns. To make this easier, the IRS has given you until October 15, 2025, to make this choice.
Taxpayers must include the FEMA declaration number for the disaster area when they file a claim for losses caused by a disaster.
Also, disaster relief funds that are used to pay for damage to property or people are often not taxed, which helps those who are affected financially even more.
One important part of the IRS’s rescue efforts is that they have special steps for people who need to access their retirement plans or IRAs after the disaster.
People younger than 59½ usually have to pay a 10% penalty when they take money out of their retirement savings too soon. But for people who were hurt by Hurricane Helene, the IRS has waived the penalty for taking money out early to help with disaster recovery.
People who are affected may also choose to spread the money they get from these withdrawals out over three years, which lowers their instant tax liability.
There are ways to take money out in times of hardship, but based on the type of retirement plan, there may be limits.
These tax breaks are part of a bigger federal reaction to the damage caused by Hurricane Helene, which also includes working with FEMA and other groups. The damage estimates from FEMA were a big part of how the IRS made its plans for helping people.
As the recovery process goes on, the IRS will continue to adapt its help to the changing needs of communities touched by the hurricane. This will make sure that those who were hurt get all the help they need to rebuild and get better.
Also see:-The Social Security Administration will increase the average benefit by $50 as of January 1, 2025
