Hurricane Ian Tax Relief: Financial information you should know

Individuals and businesses impacted by Hurricane Ian now qualify for tax relief. Following the recent disaster declaration issued by the Federal Emergency Management Agency (FEMA), the IRS announced that anyone in the state of Florida now has until February 15, 2023, to file various individual and business tax returns and make certain payments.

The relief applies to any designated area by FEMA. A comprehensive list of eligible locations can be found on the IRS website’s disaster relief page.

Who the Disaster Relief Affects

Taxpayers who live in the covered disaster area or businesses located in the affected area are eligible to postpone the time to file returns, pay taxes and perform other sensitive acts.

The IRS is now giving affected individuals and businesses until February 15, 2023, to file tax returns including individual, corporate, estate, and trust income tax returns, partnership returns, S corporation returns, trust returns, annual information returns of tax-exempt organizations, and the filing of form 5500.

Taxpayers who have an estimated income tax payment due on or after September 23, 2022, now have until February 15, 2023, to make payments without facing any penalties.

1031 Extensions

Affected persons are those who live in the covered disaster areas or have a primary place of business there. Taxpayers are eligible to receive relief regardless of where the relinquished or replacement property is located.

Individuals can choose between two relief options: General Postponement Relief or Alternative Relief.

General Postponement Relief states that any 45-day or 180-day deadline that falls on or after Sep 23, 2022 is postponed until February 15, 2023, for forward and reverse 1031 exchanges.

Alternative Relief is only available if the relinquished property was transferred on or before September 23, 2022. Any 45-day or 180-day deadline that falls on or after September 23 is extended to the longer of either 120 days from such deadline or February 15, 2023.

How to Receive Relief

Residents of Florida do not have to apply for filing, payment, or penalty relief. The IRS will automatically extend relief to anyone with an address on record within the disaster area.

If you receive a late filing or payment notice from the IRS but qualify for relief, you should contact the IRS.

Other Relief Available

If located in the disaster area, businesses and individuals can claim disaster-related casualty losses on their federal income tax return either the year it occurred or the year after. Losses can include property losses that are not covered by insurance.

The IRS is also waiving the usual fees for copies of previously filed tax returns. In the Disaster Designation section, put “FL Hurricane Ian” in bold letters at the top of your request form and submit it to the IRS.

For more detailed information on the tax relief available for Hurricane Ian in Florida, visit the IRS Website.  As of March 2023, Congress is still debating if SWFL will be coverage as Disaster Zone eligible for casualty loss relief. 

Please check out our new Blog: Observations on Real Estate Investing after a Hurricane

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