In response to the devastation caused by Hurricane Helene, the IRS has granted special tax relief for individuals and businesses affected in North Carolina and other impacted states. With catastrophic flooding and infrastructure damage, the IRS aims to ease the financial burden by extending key tax filing and payment deadlines to May 1, 2025.

Who Qualifies for the Tax Relief?

The tax relief applies to individuals and businesses residing or operating in FEMA-designated disaster areas. For North Carolina, the entire state qualifies, as do certain parts of other affected states like South Carolina, Florida, Georgia, Alabama, Tennessee, and Virginia. The relief includes any taxpayer whose records are located in these areas, including out-of-state individuals whose necessary documentation is kept in the affected region .

Key Deadlines Postponed

The IRS has postponed various deadlines for filing and paying taxes, offering victims additional time to meet their obligations. Specifically:

• 2023 Federal Returns: Individuals or businesses that requested extensions for 2023 taxes now have until May 1, 2025, to file their returns. Note, however, that payments associated with these returns are not covered, as they were due earlier.
• 2024 Tax Returns: Any federal tax returns due between September 2024 and April 2025, including individual and business tax returns, are extended to the new deadline in May.
• Estimated Taxes: The postponement also applies to quarterly estimated income tax payments, originally due on January 15, 2025, and April 15, 2025.
• Payroll and Excise Taxes: For businesses, quarterly payroll and excise tax returns due on October 31, 2024, January 31, 2025, and April 30, 2025, are also postponed .

Penalty Relief and Retirement Provisions

In addition to filing extensions, the IRS is offering penalty relief for payroll and excise tax deposits due after the hurricane. Businesses affected by Hurricane Helene will not face penalties for late tax payments during the relief period. Furthermore, under the SECURE 2.0 Act, victims may take early distributions from retirement plans like 401(k)s and 403(b)s without facing the typical 10% penalty. Affected individuals can withdraw up to $22,000 without incurring penalties .

This tax relief is crucial for hurricane victims who are working to rebuild their lives and businesses, giving them more time to manage their finances without worrying about looming tax deadlines.