Comprehensive Tax Relief for Texas Counties Affected by Hurricane Beryl

The Internal Revenue Service (IRS) has announced significant tax relief measures for individuals and businesses in 67 Texas counties impacted by Hurricane Beryl, which struck on July 5, 2024. This initiative extends the deadline for filing various federal tax returns and making tax payments until February 3, 2025.

Scope of the Relief

The relief applies to any area designated by the Federal Emergency Management Agency (FEMA). The affected counties include Anderson, Angelina, Harris, Hidalgo, and many more. The complete list of eligible counties is available on the IRS website and will be updated as more areas are added to the disaster designation.

Specific Extensions

The extended deadline applies to:

• Individuals and businesses with valid extensions to file their 2023 federal tax returns. Although the filing deadline is extended, the payments for these returns, which were due last spring, do not qualify for the extra time.

• Quarterly estimated income tax payments normally due on September 16, 2024, and January 15, 2025.

• Quarterly payroll and excise tax returns due on July 31, 2024, October 31, 2024, and January 31, 2025.

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Additionally, penalties for failing to make payroll and excise tax deposits due from July 5, 2024, to July 22, 2024, will be waived if the deposits are made by July 22, 2024.

Automatic Relief and Special Circumstances

The IRS will automatically provide filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Taxpayers do not need to contact the IRS to receive this relief. However, if an affected taxpayer has relocated to the disaster area after filing their return and subsequently receives a late filing or late payment penalty notice, they should call the number on the notice to have the penalty abated.

The IRS will also work with taxpayers living outside the disaster area if their records needed to meet a deadline during the postponement period are located within the affected area. These taxpayers, as well as workers assisting in relief efforts, should contact the IRS at 866-562-5227 for assistance.

Additional Relief Options

Taxpayers in the disaster area who suffered uninsured or unreimbursed disaster-related losses can claim these losses on either their 2024 tax return (filed next year) or their 2023 tax return (filed this year). The deadline for making this election is six months after the due date of the taxpayer’s federal income tax return for the disaster year, which means October 15, 2025, for individual taxpayers. Taxpayers must write the FEMA declaration number – 4798-DR – on any return claiming a loss.

Qualified disaster relief payments are generally excluded from gross income. This includes amounts received for reasonable and necessary personal, family, living, or funeral expenses, as well as for the repair or rehabilitation of a home or the repair or replacement of its contents. Additional details can be found in IRS Publication 525.

Retirement Plan and IRA Provisions

Affected taxpayers may be eligible for special disaster distributions from retirement plans or individual retirement arrangements (IRAs). These distributions would not be subject to the 10% early distribution tax and allow the taxpayer to spread the income over three years. Taxpayers may also qualify for a hardship withdrawal, subject to specific rules and guidance provided by each plan or IRA.

Ongoing Support

The IRS's tax relief is part of a coordinated federal response to the damage caused by Hurricane Beryl, based on local damage assessments by FEMA. The IRS may provide additional disaster relief as necessary in the future. For more information on disaster recovery, taxpayers can visit DisasterAssistance.gov.

For further details on the tax relief and to stay updated on any changes or additional provisions, visit the IRS Disaster Assistance and Emergency Relief for Individuals and Businesses page on IRS.gov.

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.