Hurricane tax relief from Hurricane Laura: Do I qualify?

Mother and daughter work to clear debris near their home after a hurricane.
Mother and daughter work to clear debris near their home after a hurricane.

The IRS provides relief for taxpayers during disasters for many reasons. In the aftermath of a hurricane, such as Laura, power outages can persist for weeks or months.

Many homes and businesses could be severely damaged or destroyed, including important tax records within those structures. Providing disaster relief gives these taxpayers time to put their lives back together and get to a position to accurately fulfill their tax responsibilities.

The relief provided and applicable timelines

Relief for taxpayers affected by Hurricane Laura began on August 22, 2020, and runs through December 31, 2020. This timeline is the same for

  • individuals,

  • self-employed individuals and

  • business taxpayers.

Most tax returns or tax payment deadlines that initially fell during this period are now due December 31, 2020. The IRS extended most tax returns, including the following types of returns, if they're due or had a valid extension making them due during the above time frame:

  • Individual tax returns

  • Corporate tax returns

  • Partnership tax returns

  • S corporation tax returns

  • Estate and trust tax returns

  • Estate, gift and generation-skipping transfer tax returns

  • Annual information returns of tax-exempt organizations

  • Employment and certain excise tax returns

  • Form 5500 series returns

Returns that were originally due on July 15, 2020 and extended to October 15, 2020, do not get an extension of time to pay. This is because the original payment deadline of July 15, 2020 fell before the Hurricane Laura disaster period.

  • Quarterly estimated tax payments due during the time period are extended — including the third-quarter estimated tax payment due September 15, 2020.

  • Payroll and excise tax deposits follow different rules. Any deposits due after August 22, 2020, but before September 8, 2020, will not incur penalties as long as the deposits are paid by September 8, 2020.

A tax break for certain disaster-related losses

If you have unreimbursed disaster-related losses, you may be able to get a tax break. You can file Form 4684, Casualties and Thefts to claim any eligible tax break, which TurboTax can help you determine if you're eligible.

  • You'll need to include the Federal Emergency Management Agency (FEMA) declaration number "FEMA 4559" and have "Louisiana - Hurricane Laura" printed in bold letters at the top of the form when completing Form 4684.

The tax relief allows you to claim these losses on:

  • your 2020 tax return, filed in early 2021, or

  • your 2019 tax return, originally due July 15, 2020.

If you've already filed your 2019 tax return and would like to claim the loss on that return, you can file an amended return, Form 1040X.

Areas that qualify for relief

In particular, the IRS is providing tax relief to areas that qualify for individual assistance as designated by FEMA due to the challenging circumstances these taxpayers face.

Currently, these areas include the following parishes in Louisiana:

  • Acadia

  • Allen

  • Beauregard

  • Calcasieu

  • Cameron

  • Grant

  • Jackson

  • Jefferson Davis

  • Lincoln

  • Natchitoches

  • Ouachita

  • Rapides

  • Sabine

  • Vermillion

  • Vernon

  • Winn

If FEMA adds more areas to the disaster area, taxpayers in the additional areas will qualify for the same relief.

How to apply for hurricane tax relief

You don't need to apply for this relief if your address of record with the IRS is in one of the qualifying parishes. This includes both individuals and businesses if the principal place of business is listed in these areas. The relief is automatically applied and there's no deadline for requesting it.

  • Certain taxpayers may qualify for relief even if they don't live in the disaster area.

  • If you or your business's records are located within the impacted area, you can call the IRS to work with them.

That said, it's possible an IRS error may result in a late filing or late payment penalty notice. If this happens, call the phone number on the notice and inform them you live in or your principal place of business is in a disaster relief parish under FEMA declaration number 4559 for Hurricane Laura. This should result in the penalty being abated, assuming you qualify.

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