You Have More Time to File Taxes (depending on the state you live in)
- Davian Rhodes, CPA
- Mar 17
- 4 min read
D. Rhodes, CPA, Writer and Editor
If you're in Alabama, Florida, Georgia, North Carolina, South Carolina, or designated parts of Tennessee and Virginia, you've been granted a significant filing extension and potential tax benefits that could save you thousands of dollars.
The Evolution of Disaster Tax Relief: A Brief History
Before diving into everything, it's worth understanding how the IRS came to offer such relief in the first place.
The IRS's authority to postpone tax deadlines during federally declared disasters stems from Section 7508A of the Internal Revenue Code, enacted as part of the Taxpayer Relief Act of 1997. This legislation followed a series of devastating natural disasters in the mid-1990s, including Hurricane Andrew and the Great Flood of 1993, which highlighted the need for systematic tax relief during recovery periods.
Over time, Congress expanded these provisions through subsequent legislation such as the Disaster Tax Relief and Airport and Airway Extension Act of 2017, which enhanced casualty loss rules and created additional relief measures. What began as ad-hoc responses to major disasters has evolved into a comprehensive system of tax relief that automatically activates when FEMA declares a disaster area.
According to the IRS announcement released on October 11, 2024 (IR-2024-266):
"The IRS automatically gives taxpayers whose address of record is in a disaster-area locality more time to file returns and pay taxes. Taxpayers get the extra time without having to ask for it."
The notice went on to specify:
"Currently, taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Tennessee and Virginia, who received extensions to file their 2023 returns have until May 1, 2025, to file. Tax-year 2023 tax payments are not eligible for this extension. In addition, May 1 is also the deadline for filing 2024 returns and paying any tax due."
This means that regardless of whether your specific neighborhood suffered damage, if your address of record falls within these states, you automatically qualify for this extension.
Many affected taxpayers are simply unaware that these relief measures exist. After all, when rebuilding homes and lives, tax considerations rarely top the priority list.
Historical data from previous disaster recovery efforts suggests that fewer than 30% of eligible taxpayers fully utilize available tax relief measures. This means the vast majority of people potentially leave money on the table—money that could significantly aid recovery.
Filing Extension and Disaster Loss Deduction
If you live in any of the affected states mentioned above, you've been automatically granted an extension until May 1, 2025—for both your 2023 returns (if you received a prior extension) and your 2024 returns.
As the filing deadline approaches, affected residents face an important decision regarding the casualty loss deduction—possibly the most valuable but underutilized natural disaster tax benefit.
This provision allows taxpayers to deduct unreimbursed disaster losses—those not covered by insurance—on their tax returns. With the May 1st deadline approaching, you must decide whether to:
Claim losses on your 2024 return (which you're preparing now)
Amend your already-filed 2023 return to claim the losses
The IRS notice explains:
"In some instances, individuals and businesses in a federally-declared disaster area can qualify for a casualty loss tax deduction. The deduction is available for damaged or destroyed property not covered by insurance or other reimbursement and can result in a larger refund.
A unique feature of this deduction is that taxpayers can choose to claim it on either the return for the year the loss occurred (in this instance, the 2024 return normally filed next year), or the return for the prior year (the 2023 return filed this year). For individual taxpayers, the deadline for making this election is Oct. 15, 2025."
Strategic consideration: You have until October 15, 2025, to decide which tax year would provide the larger benefit. If your income was higher in 2023 than in 2024, claiming the loss on your 2023 return might yield a greater tax benefit due to the higher tax bracket.
Many natural disaster victims experience what researchers call "decision fatigue." After months of making countless recovery-related choices, the complexity of tax filing—especially with disaster provisions—can overwhelm even the most resilient individuals.
Behavioral economics research from Princeton's Dr. Eldar Shafir on decision-making under scarcity shows that the ongoing mental taxation of recovery makes it particularly difficult to navigate complex systems like tax relief. This helps explain why so many eligible taxpayers fail to claim benefits they deserve.
Execution: Next Steps
Verify your eligibility: If your address of record is in any of the affected states, you automatically qualify for the May 1st extension.
Review your documentation: Organize all evidence of natural disaster-related losses and expenses from 2024 that weren't fully covered by insurance.
Calculate your potential benefit: Determine whether claiming losses on your 2024 return or amending your 2023 return would provide the larger benefit.
Consider professional assistance: With specialized disaster tax provisions at stake, consulting with a tax professional familiar with disaster relief could pay dividends.
File or amend electronically: With the deadline approaching, electronic filing provides the fastest processing and refund delivery.
For many people, natural disaster recovery extends beyond a single tax year. Those still rebuilding should maintain detailed records of ongoing expenses, as some costs incurred in 2025 may qualify for deductions on next year's return if they relate to the original disaster.
Additionally, taxpayers who took retirement plan distributions for natural disaster recovery should be aware of special provisions regarding the taxation of these withdrawals, as the IRS notes:
"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."
The extended tax deadline represents an opportunity for affected individuals to maximize available relief as they continue rebuilding their financial lives. By understanding and utilizing these provisions before the May 1st deadline, natural disaster victims can alleviate some of the financial burden as they move forward.
Remember: Our ultimate goal is to help you save time and money, while building wealth and legacy.
The choice is yours, but the clock is ticking. Reach out today so we can help get you from where you're at, to where you want to be.
*This article provides general information, not individual tax advice. Tax situations vary; consult with a qualified tax professional, like myself, for advice specific to your circumstances.