Most of Florida eligible for Hurricane Idalia federal tax relief

8 months ago 176

Storm surge along Bayshore Boulevard and the Tampa Convention Center on Aug. 30, 2023, morning as Hurricane Idalia made landfall almost 200 miles north in Florida's Big Bend. (Photo by Andrew Heneen via Wikipedia Commons)

Hurricane Idalia made landfall on Aug. 30 in Florida's Big Bend as a category 3 storm. It was the strongest hurricane to make landfall in that part of the Sunshine State in more than 125 years.

Storm surge from Idalia also set records in multiple locations in Florida far from the landfall site. Substantial structural damage was reported due to winds and flooding. More than 500,000 residents in the state were without power immediately after the storm hit.

More tragically, Hurricane Idalia also is being blamed for at least one death.

All this means that Idalia-affected Florida residents aren't thinking about taxes right now.

But when they do get around to it, the Internal Revenue Service has announced they will get some special tax consideration, including a new Feb. 15 deadline for a variety of tax matters.

Delayed date for filing, paying taxes: The federal tax relief postpones various tax filing and payment deadlines that fall from Aug. 27, when the storm's approach began to be felt, through Feb. 15, 2024.

During this postponement period, affected individuals and businesses will have until that mid-February date next year to file returns and pay any taxes that were originally due during this period.

The new Feb. 15, 2024, deadline applies to —

Individuals who had a valid extension until Oct. 16 to file their 2022 tax return.
NOTE: The Feb. 15, 2024, deadline applies to the filing of 1040 forms only. Extension requests are granted for submission of tax forms; the extension does not delay payments. Any tax associated with 2022 filings was due by April 18, 2023, meaning those payments are not eligible for the Idalia relief. Penalties and interest will continue accrue on unpaid 2022 taxes.
Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.

The IRS also said penalties for the failure to make payroll and excise tax deposits due on or after Aug. 27, 2023, and before Sept. 11, 2023, will be abated as long as the deposits are made by Sept. 11, 2023.

Affected Florida counties: Idalia tax relief applies to individuals and households that reside or have a business in relief areas designated by the Federal Emergency Management Agency (FEMA). That's currently 49 of Florida's 67 counties.

If you're looking at the above FEMA map on a small device, here are the counties covered under the major, presidential disaster declaration: Alachua, Baker, Bay, Bradford, Brevard, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Flagler, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hardee, Hernando, Hillsborough, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Nassau, Orange, Osceola, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, Sumter, Suwannee, Taylor, Union, Volusia, and Wakulla.

The IRS says if FEMA adds any other areas to the Idalia declaration, those areas will also qualify for the announced relief.

No need to call IRS: The IRS relies on its taxpayer database for disaster relief, meaning it automatically provides filing and penalty relief to any taxpayer whose IRS address of record is in the disaster area.

However, it is possible an affected taxpayer may not have an IRS address of record located in the disaster area. This could be the case, for example, where someone moved to Florida after filing their return and did not notify the IRS of their new Sunshine State address.

In these circumstances, affected taxpayers 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 necessary to meet a deadline occurring during the postponement period are located in the affected areas. These taxpayers should contact the IRS at (866) 562-5227.

This option also applies to workers assisting the relief activities provided through a recognized government or philanthropic organization.

Claiming a disaster tax deduction: Federal tax law also provides those who've endured a major disaster the option to claim any uninsured losses as a tax deduction. You also get to decide on the tax year you use to make the claims.

I discuss this option in the all-too-frequent disaster declaration posts here on the ol' blog. You can find more about disaster claim filings in my post Considerations in making a major disaster tax claim.

But I do want to reiterate here the choice of tax year in claiming eligible disaster losses. You can claim qualifying losses in either the year the disaster occurred, or the previous tax year.

Affected Florida taxpayers who can claim Hurricane Idalia losses as an itemized tax deduction need to carefully determine whether to count them on their 2022 or 2023 tax returns.

Taxpayers who got extensions to file 2022 returns can make the claims on that return now due Feb. 15, 2024.

Affected Floridians who've already filed their 2022 returns can amend that filing and claim the fire losses on their Form 1040-X.

However, if it's better for them to claim disaster losses on their 2023 returns, then they can do that on that filing that's due by April 15, 2024.

Regardless of which tax filing you choose to make the disaster loss claim, include the FEMA Florida disaster number EM-3596-FL on the filing.

You can read more about making major disaster loss tax claims in IRS Publication 547. The IRS' Disaster Assistance and Emergency Relief for Individuals and Businesses page also has more information on returns, payments, and tax-related actions for qualifying taxpayers.

Finally, you also might find these earlier blog posts of interest: