Filing tax relief for clients affected by natural disasters

Unfortunately, natural disasters happen. When they strike, people are left to regain a sense of normalcy as they work to rebuild their lives, homes, and businesses. This includes helping clients access any tax relief for natural disasters they qualify for.

In recent years, the frequency and costs of natural disasters have been increasing. Between 1980 and 2024, the U.S. experienced 403 weather and climate disasters, each causing damages and costs of $1 billion or more, according to NOAA’s National Centers for Environmental Information (NCEI). The total cost of these 403 billion-dollar events? More than $2.915 trillion.

When these tragedies occur, the IRS makes it a priority to help individuals and businesses in need, working closely with other federal agencies and often issuing disaster tax relief to taxpayers.

For accountants, it’s important to help their clients work through the necessary forms and ensure compliance as the modified tax deadlines draw near. These clients are already under enough stress, and expert guidance means one less thing they need to worry about.

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What are the different types of disaster tax relief?

Current tax relief for natural disasters

What are the deadlines to file tax returns for natural disasters?

Identifying eligible clients

How to easily file natural disaster returns with UltraTax CS

What are the different types of disaster tax relief?

When the president signs either an emergency measures declaration or a major disaster declaration offering “Individual Assistance” in at least one county named in the declaration, the IRS will then provide administrative disaster tax relief to all areas specified in the declaration.

The relief grants extra time for individuals and businesses impacted by a federally declared disaster to file returns, pay taxes, and meet other tax deadlines. Here’s a breakdown of the different types of disaster tax relief provided by the IRS:

More time to file and pay taxes

If a taxpayer’s address of record is in an area qualifying for IRS disaster relief, they automatically receive extra time from the IRS to file returns and pay taxes without penalties or interest. Generally, the relief applies to individual income and business tax returns, payroll and excise tax deposits, estimated tax payments, and other deadlines.

Special retirement plan distributions and contributions

The IRS may also provide relief to impacted taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, your client may be able to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and spread that income over three years. They may also be eligible for a hardship withdrawal.

Exclusion from gross income

Qualified disaster relief payments are generally excluded from gross income. This means your client might be able to exclude from their gross income money they received from a government agency for personal, family, living, or funeral expenses, as well as for the repair of their home, or for the repair or replacement of its contents.

Casualty loss tax deductions

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses may qualify to claim a casualty loss tax deduction. They can claim this on their current or prior-year tax return, which could result in a larger refund.

It should be noted that state agencies may or may not adhere to the IRS disaster relief provisions, so consulting with the relevant state agency for guidance is important.

Current tax relief for natural disasters

Each year, the IRS issues several major disaster relief measures. For instance, in 2024, the IRS granted tax relief for federal disaster areas in roughly 40 states.

So far in 2025, the IRS has provided tax relief for federal disaster areas in at least a dozen states, and there’s a good chance we will see more as the year progresses. Some of the most recent examples include:

West Virginia

Beginning on June 14, 2025, parts of West Virginia were hit by severe storms, straight-line winds, flooding, landslides, and mudslides. The IRS announced that these taxpayers now have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. This also applies to estimated income tax payments, payroll, excise tax returns, and other deadlines.

New Mexico

Beginning on June 23, 2025, parts of New Mexico were affected by severe storms, flooding, and landslides. The IRS announced that individuals and households residing or having a business in Chaves, Lincoln, Otero, and Valencia counties are eligible for tax relief. They have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. This also applies to estimated income tax payments, payroll, excise tax returns, and other deadlines.

Texas

Since July 2, 2025, parts of Texas were impacted by severe storms, straight-line winds, and flooding. As a result, individuals and households residing or having a business in Burnet, Coke, Concho, Edwards, Hamilton, Kendall, Kerr, Kimble, Lampasas, Llano, Mason, McCulloch, Menard, Real, Reeves, San Saba, Schleicher, Sutton, Tom Green, Travis, and Williamson counties qualify for tax relief. These taxpayers have until Feb. 2, 2026, to file various federal individual and business tax returns and make tax payments. This also applies to estimated income tax payments, payroll, excise tax returns, and other deadlines.

Missouri

On May 16, 2025, parts of Missouri were struck by severe storms, straight-line winds, tornadoes, and flooding. The IRS announced that these taxpayers now have until Nov. 3, 2025, to file various federal individual and business tax returns and make tax payments. This also applies to 2024 contributions to IRAs and health savings accounts for eligible taxpayers, estimated tax payments, payroll, excise tax returns, and other deadlines.

California

Earlier in the year, beginning Jan. 7, 2025, wildfires and straight-line winds ripped through parts of the state, leaving devastation and mass destruction in its wake. Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households residing in or having a business in Los Angeles County were granted tax relief. These taxpayers now have until Oct. 15, 2025, to file various federal individual and business tax returns and make tax payments. This also applies to estimated income tax payments, payroll, excise tax returns, and other deadlines.

What are the deadlines to file tax returns for natural disasters?

The filing deadlines vary and can be further postponed by the IRS because of lingering effects, as was the case for victims in North Carolina.

Citing lingering effects of Hurricane Helene, the IRS postponed a wide range of tax deadlines until September 25, 2025, for individual and business taxpayers throughout North Carolina. Previously, the postponed deadline had been May 1, 2025, for Form 1040 filers, among others.

Additional key filing deadline dates across multiple states include:

Nov. 3, 2025: Kentucky, West Virginia (counties impacted by a natural disaster that began on Feb. 15, 2025), Tennessee, Arkansas, Virginia, Missouri, Oklahoma, Texas, and Mississippi.
Feb. 2, 2026: West Virginia (taxpayers impacted by a natural disaster that began on June 14, 2025), Texas, and New Mexico.

Identifying eligible clients

Quickly and efficiently identifying those clients who are impacted by a natural disaster and eligible for tax relief starts with having the right tools and resources in place.

Leveraging robust tax research tools, for instance, enables practitioners to stay up to date on the latest news within the context of their research, and timely news alerts can further help tax professionals stay informed.

Data mining functionality can also prove beneficial as it enables tax professionals to quickly spot clients affected by new tax laws or changes.

How to easily file natural disaster returns with UltraTax CS

Firms can easily file tax returns for individual and business clients who have been affected by natural disasters with Thomson Reuters UltraTax CS. With features like data mining, advanced diagnostics, and intelligent calculations, UltraTax CS ensures form accuracy with calculations to handle various levels of complexity.

The multi-entity capabilities of UltraTax CS prove particularly valuable when handling disaster returns for businesses with multiple locations or complex organizational structures affected by natural disasters. The software’s centralized data management system allows tax professionals to efficiently coordinate disaster-related adjustments across related entities, ensuring consistent treatment of casualty losses and disaster relief benefits.

UltraTax CS also features robust documentation tools that help maintain detailed records of disaster-related transactions and supporting documentation, which is crucial for audit defense and compliance with IRS requirements. Additionally, the platform’s electronic filing capabilities expedite the submission process, helping disaster victims receive their refunds more quickly during challenging recovery periods.