New Tax Relief Options for Natural Disaster Victims

Overview of new tax rules found in Filing Relief for Natural Disasters Act and H.R.1

With hurricane season underway, recent legislation brings significant changes to how individuals and businesses may access tax relief following natural disasters. These updates aim to provide faster and more flexible relief to victims.

Here’s what you need to know about the new laws and how they may offer new opportunities for relief.

Disaster declarations no longer required to file extensions

On July 25, 2025, Congress passed the bipartisan Filing Relief for Natural Disasters Act (P.L. 119-29), signed into law by President Trump. Historically, taxpayers needed a presidential disaster declaration to qualify for filing and payment extensions. The new law allows Treasury to postpone federal tax deadlines after a state-declared disaster.

What the new law means for individuals and business owners:

• Relief can now be provided for any natural catastrophe as well as fires, floods, or explosions (regardless of cause) even if the federal government has not yet issued a disaster declaration.
• The mandatory suspension period for tax deadlines has increased from 60 days to 120 days.
• Treasury must consult with FEMA, and the event must meet a threshold of severity and magnitude.

These changes aim to reduce the delay in accessing much-needed relief and minimize the administrative burden on affected taxpayers.

Extension of casualty loss deduction rules

H.R.1, formerly The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, provides updates to the disaster provisions found in that Tax Cuts and Jobs Act. Beginning in 2026, taxpayers may deduct personal casualty losses from both federally and state-declared disasters, provided the event is severe enough and recognized by Treasury.

For qualified disaster losses:

• Deductions are allowed even if the taxpayer claims the standard deduction.
• The per-casualty floor for deductible losses per incident has increased from $100 to $500.
• The requirement that losses exceed 10% of adjusted gross income (AGI) has been eliminated.

Natural disaster preparedness tips

While you can’t control when or where a hurricane or other natural disaster takes place, you can take practical steps to protect important financial and tax records before a disaster occurs.

• Include safeguarding tax and financial documents in your disaster preparedness plan.

• Stay informed. Keiter monitors legislation and IRS guidance to help you take timely advantage of all available relief.

Keiter is committed to helping our clients uncover opportunity even in challenging times. If a disaster affects you or your business, our team is ready to provide insight, support, and the experience needed to navigate your next steps with confidence.

Questions specific to your unique situation? Contact your Keiter Opportunity Advisor.