If you have been the victim of one of the recent devastating hurricanes, you probably already have a lot to worry about. The last thing you want is a long intro to remind you how bad hurricanes are.
So let’s get down to business.
Here is a breakdown of the tax credits offered by the IRS to victims of Hurricane Fiona and Hurricane Yan.
To begin with, good tax software or a tax professional can help you with all of this. Half of all Americans use a professional tax professional to help them file their returns, and the rest use electronic tax filing software that is getting easier to use every year.
So don’t feel like you have to memorize all those qualifications and forms. Just be aware that they are and bookmark this page for the tax period.
TL;DR: IRS Offers 4 Forms of Tax Relief
I’ll go into the who/what/when below, but first, here’s a quick overview of the assistance the IRS is offering disaster victims in 2022:
- Extension of the term – Almost all of the paperwork you were supposed to file with the IRS between now and January has been pushed back to February 15, 2023.
- Qualified disaster losses − Losses incurred from accidents (i.e. property damage) can now be treated as qualified losses due to natural disasters with additional tax benefits.
- Waiver of fees for past tax returns – Victims in affected areas may request copies or transcripts of past tax returns without paying a $43 fee.
- Fees or expertise may be overpriced − Disaster victims contacted by the IRS regarding collection or screening may receive extensions or additional forms of assistance.
Who is insured?
Hurricane Yang victims (all of Florida)
The IRS said it would work with hurricane victims “throughout Florida” who suffered losses due to the hurricane.
And they don’t exaggerate. It’s literally all of Florida.
This is because in the event of a natural disaster, the IRS uses the official Federal Emergency Management Agency (FEMA) map of affected areas. And Yang was so devastating that the Federal Emergency Management Agency declared the entire state an affected area.
Source: Federal Emergency Management Agency.
As a result, it includes all individuals and households who live or have a business “anywhere in the state of Florida”.
Hurricane Fiona casualties (all of Puerto Rico)
The IRS will also provide identical tax credits to victims of Hurricane Fiona with homes or businesses in Puerto Rico. At the time of this writing, these are “all 78 municipalities”.
Victims of other natural disasters in 2022 (hurricanes in Alaska, wildfires, etc.)
Generally speaking, the IRS response to most disasters has been to extend your deadlines and remind you to include uninsured disaster-related losses on your returns. So if you’ve been hit by major storms in Alaska or wildfires in California, most of what you’re reading here probably applies to you as well.
However, it helps to confirm and read the fine print as things can change over time. If you were affected by a non-hurricane disaster, please visit the IRS Disaster Tax Relief page to learn more about assistance for your specific situation:
Source: IRS.gov
What if I am outside of the affected areas but my business is still affected?
Tax credits are reserved for victims with addresses in affected areas. This means that if your business is more indirectly affected by the hurricane, you are probably not eligible for any tax credits.
However, the IRS makes two exceptions, claiming they will work with:
- Any taxpayer who resides outside the disaster area but whose documentation required to meet the deadline falling within the grace period is in the affected area; as well as
- Relief workers associated with a recognized government or charitable organization.
To break no. 1 a little more, the IRS says that if you lost important tax documents during the storm (files, receipts, hard drives, etc.), then you probably qualify for help.
However, because you live outside the affected areas, the IRS will not automatically offer you assistance. You need to contact them (866-562-5227) to explain your situation.
If I qualify, what do I need to do to get help?
To request an extension, you simply need to verify your address with the IRS using your most recent tax return. If your IRS-registered address is in an official FEMA disaster area, you are automatically eligible for an extension of the deadline. There is no need to contact them.
However, you may still receive an erroneous penalty or late application notice. If so, the IRS says you just need to call the number on the fine/notice to reduce (i.e. remove) it.
To claim disaster losses on your tax returns, you must include a disaster designation on Form 4684. To do this, you write “Hurricane Fiona in Puerto Rico” or “Hurricane Yan in Florida” in large, bold letters facing up. Top. You will also need to provide the FEMA Disaster Declaration number: EM-3583-PR or DR-4673-FL, respectively.
If you pay taxes yourself, Publication 547 can help you with this.
Good. Now that we know who qualifies as a relief, let’s talk about what that relief looks like.
What tax credits are available for victims?
Here is a much more detailed breakdown of the four items listed in my TL;DR at the top of the article. And remember, the IRS has a lot of additional resources to further help Jan and Fiona’s victims:
Extension of the application deadline
The main form of IRS assistance is time. In short, if you are a Florida or Puerto Rican resident and you It was As the tax filing deadline approaches, it has almost certainly been pushed back to February 15, 2023.
This includes:
- The 2021 application deadline extension was originally due on October 17, 2022.
- Estimated tax payments for the 4th quarter of 2022, initially due on 17 January 2023
- Quarterly payroll and excise tax returns initially filed October 31, 2022 and January 31, 2023
It never hurts to start paying your taxes early, especially when you need time to calculate qualified disaster damage, as discussed below, but at least you have one less problem now as you focus on recovery.
Uninsured or unrecovered damages related to a natural disaster may be claimed against taxes for 2021 or 2022.
In addition to the extension, victims will be able to list qualified disaster losses in their taxes to receive some cash assistance.
In short, qualified disaster losses are things like home repairs, car repairs/replacements, etc. that you incur as a direct result of a disaster. The IRS will allow you to deduct some of the remaining losses. after insurance has already paid. For Hurricanes Fiona and Yan, you also have the choice of including them on your 2021 (if you had a valid extension) or 2022 declaration.
The formula for determining and calculating qualified disaster losses is a bit complicated. Again, tax software and life tax specialists can help you and file them properly. To learn more and/or try it yourself, see IRS Topic 515.
Fees Temporarily Waived for Requests for Previously Filed Tax Returns
The IRS will always send you a copy of your old tax return upon request if you file Form 4506, but they usually charge a $43 fee (so you always want to keep your own records).
Fortunately, this fee is not currently charged for hurricane victims.
Any person contacted about a collection or examination may also receive assistance.
At the very bottom of their announcement, the IRS says that anyone they contact about a “collection or review matter” will have the opportunity to explain how the disaster has affected them.
They don’t give details, but it’s possible that if you live outside of the affected areas and a natural disaster directly caused you to miss a deadline or payment, you might have a chance to explain yourself and see some relief.
What other federal assistance is available for hurricane victims?
Back in September, President Biden approved FEMA assistance to both Puerto Rico and Florida to support hurricane relief efforts.
To apply for assistance, visit www.DisasterAssistance.gov. And for advice 24/7, you can call the emergency helpline.
The US Small Business Association (SBA) also offers federal disaster relief in the form of personal injury loans, mitigation assistance, and more. To learn more, visit the SBA Disaster Relief Homepage.
Finally, the Consumer Financial Protection Bureau (CFPB) offers a helpful landing page that simply aggregates all federal financial assistance. Check out their financial toolkit for those affected by hurricanes Fiona and Yan.
What about government assistance?
Visit FLGov.com for a list of ways to get help from the Florida State Emergency Management Agency (FDEM), such as the emergency distribution center closest to you.
Government officials also provided three helpful tips that apply to all victims:
- Call your insurance company immediately and take a bunch of photos of the damage to your property.
- Find out if your county has an “insurance village” where you can file claims in person.
- Beware of scams and stick to the help provided by .gov websites and your own insurance company.
How can I support those in need?
The Office of Governor Ron DeSantis has officially approved the Florida Disaster Relief Fund as a legitimate way to donate and support victims.
