The IRS announced tax relief for individuals and businesses in Texas impacted by severe storms, straight-line winds, tornadoes and flooding that began on April 26, 2024. Affected taxpayers now have until Nov. 1, 2024, to file various federal individual and business tax returns and make tax payments.  

To qualify for this tax relief, taxpayers must reside or have a business in one of the following Texas counties recognized as a federally declared disaster area:  

• Calhoun 
• Collin 
• Cooke 
• Denton 
• Eastland 
• Guadalupe 
• Hardin 
• Harris 
• Jasper 
• Jones 
• Lamar 
• Liberty 
• Montague 
• Montgomery 
• Polk 
• San Jacinto 
• Trinity 
• Walker 
• Waller 

In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief. 

The Nov. 1 deadline also applies to any payment normally due during this period, including the quarterly estimated tax payments due on June 17, 2024, and Sept. 16, 2024, and the quarterly payroll and excise tax returns normally due on April 30, 2024, July 31, 2024, and Oct. 31, 2024. In addition, penalties on payroll and excise tax deposits due on or after April 26, 2024, and before May 13, 2024, will be abated as long as the tax deposits were made by May 13, 2024. 

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty or work with their tax advisor for assistance.  

Additional Relief  

In addition to the new Nov. 1 deadline to file extended returns or make payments, affected taxpayers should also be aware of this additional relief:  

• Casualty losses. Affected taxpayers have the option of claiming disaster-related casualty losses on their federal income tax return for either the year in which the event occurred, or the prior year. In this instance, the 2024 return normally filed next year, or the return for the prior year (the 2023 return filed this year). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election.  
• Fees Waived for Copies of Tax Returns. The IRS will waive the usual fees and requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned FEMA declaration number (4781-DR), in bold letters at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS. 
• Gross Income Exclusion. Qualified disaster relief payments are generally excluded from gross income. This means affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or the repair or replacement of its contents.  
• 401(K) Distributions or Withdrawals. Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for its participants to follow, so it’s important to work with your plan provider to ensure you minimize your tax liability.  

Here to Help  

As affected taxpayers continue to recover from the recent storms, Doeren Mayhew’s individual and business tax pros are here to help with your tax filing or relief needs.