What should I know about tax relief in disaster situations?

Contents

• Who is eligible for tax relief after a disaster?
• What are my rights to tax relief after a disaster?

Who is eligible for tax relief after a disaster?

A federally declared disaster happens when the President declares that an area affectedk by a disaster is eligible for federal assistance. You can find a list of federally declared disasters on the FEMA website.

When there is a federally declared disaster, the government provides several types of tax relief. To be eligible for the tax relief, you must be an “affected taxpayer.” You are an affected taxpayer if you cannot meet a filing or payment deadline and you:

• Live in the disaster area, 

• Are a relief worker, or

• The tax records needed to file are in the disaster area. This might be the case if your tax preparer is in the disaster area.

An affected taxpayer may be:

• An individual,

• Business owner,

• Business entity,

• Sole proprietor, or 

• Shareholder in an S corporation.

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What are my rights to tax relief after a disaster?

The IRS allows several forms of tax relief for affected taxpayers:

• Extensions to file or pay taxes. You have until the last day of the Extension Period to file tax returns or make tax payments. 

  • The IRS will waive interest and late fees that would normally apply.

• Claim casualty losses. A casualty loss is property that is damaged or destroyed by a disaster. You can claim disaster-related casualty losses on your federal income tax return for this year or last year. 

• Other relief. You may need copies of previous tax returns to apply for benefits or to file an amended return. The IRS will waive the fees and expedite requests for copies of these documents.

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Contents

• How do I apply for tax relief?

How do I apply for tax relief?

If you live in the disaster relief area, you will need to mark the Disaster Designation in red ink on the tax form to get the tax relief. The Disaster Designation is the area that was declared a federal disaster area. 

The IRS toll-free number for general tax questions is 1-800-829-1040.

If your tax preparer is in a disaster area, you may also qualify to have your return postponed or extended. To be eligible, you must:

• Call the Disaster Assistance Hotline at 1-866-562-5227.

• Explain that your necessary records are located in a covered disaster area.

• Provide the FEMA Disaster Number of the county where your tax preparer is located.

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