Federal Disaster Tax Relief Act of 2023: Key Benefits for Florida Residents Impacted by Hurricanes Helene and Milton

– by Curtis H. Parry Jr. CFP®, CHFC®, CLU®, RICP®, WMCP®, CASL®
Founder & CEO

In a significant move to provide financial relief to those affected by natural disasters, the Federal Disaster Tax Relief Act of 2023 was recently signed into law. For Florida residents who faced the devastating impacts of Hurricane Helene and Hurricane Milton, this legislation delivers much-needed tax relief and financial flexibility to help rebuild lives and communities.

What is the Federal Disaster Tax Relief Act of 2023?

The law just signed designates that Hurricane Ian and other hurricanes including Hurricanes Idalia, Nicole, Fiona, Debby, Helene, and Milton should be treated as qualified disaster events for purposes of determining the tax treatment of certain disaster-related personal casualty losses. The legislation will cover any potential major disasters occurring up to 6 months after the President’s signature.

The legislation would allow Americans who were subjected to damages from hurricanes and other federally declared disasters to claim such losses without itemizing such deductions. Moreover, such losses would not have to exceed 10% of a claimant’s adjusted gross income to qualify.

Additionally, the bill excludes from taxpayer gross income, for income tax purposes, any amount received by an individual taxpayer as compensation for expenses or losses incurred due to a qualified wildfire disaster (a disaster declared after 2014 as a result of a forest or range fire). It also excludes relief payments for losses resulting from the East Palestine, Ohio, train derailment on February 3, 2023.

Tax Filing Extensions:

Florida residents living in federally declared disaster areas now have extended deadlines for filing federal tax returns. This allows individuals and businesses to focus on recovery efforts without the immediate pressure of meeting tax deadlines. If you have not received a previous tax filing extension, check with your CPA on full details on your deadline to file later in 2024. Those who have already received extension approvals have until May 1, 2025, to file their returns. Taxes owed for 2023 are not extended as they were due before the hurricanes. Estimated payments toward the 2024 tax liability (for Q3 and Q4) can be made as late as May 1, 2025. 

To qualify for these benefits, individuals and businesses must:

– Reside in or operate within a federally declared disaster area (including areas impacted by Hurricanes Helene and Milton).

– Have incurred financial losses, property damage, or disruptions as a direct result of the hurricanes.

The IRS and FEMA maintain updated lists of affected areas, so Florida residents are encouraged to verify their eligibility.

How to Take Advantage of the Relief Provisions:

File for Extensions
Work with your tax advisor to ensure you file for applicable extensions and take advantage of the additional time to submit returns and payments.

Document Losses
Maintain detailed records of disaster-related expenses, property losses, and repairs. These will be critical for claiming casualty loss deductions and other tax benefits.

Consult a Professional
Navigating the new provisions of the Federal Disaster Tax Relief Act can be complex. Partner with a qualified tax professional or wealth advisor to maximize your eligible benefits and create a plan for financial recovery.

The Federal Disaster Tax Relief Act of 2023 provides essential support to Florida residents who have endured the impacts of Hurricane Helene and Hurricane Milton. Whether through penalty-free access to retirement funds, extended filing deadlines, or valuable tax deductions, these provisions can help ease financial burdens and accelerate the recovery process.

At Unique Wealth, we are committed to helping our clients navigate these changes and rebuild stronger than before. If you or your business were affected by recent hurricanes, reach out to our team to help you navigate the relief available.