Recent hurricanes impacting Florida and several other states have created significant challenges for residents and businesses. Rea is committed to helping you understand and maximize the information available for tax relief and assistance programs. Here’s a detailed breakdown:
Available Small Business Administration (SBA) Disaster Assistance
The U.S. Small Business Administration (SBA) provides several disaster recovery loan programs, each designed to address specific recovery needs. Here’s what you need to know about each program:
Physical Damage Loans
The SBA offers Physical Damage Loans to help businesses, nonprofit organizations, and homeowners repair or replace disaster-damaged property. These loans cover a wide range of assets, including real estate, equipment and machinery, inventory, and personal property. The application process requires documentation such as property damage assessments, insurance information, and tax returns to demonstrate the extent of damage and financial need.
Economic Injury Disaster Loans (EIDL)
While Physical Damage Loans focus on property restoration, Economic Injury Disaster Loans (EIDL) provide essential working capital when businesses can’t meet their financial obligations due to disaster impacts. These loans help cover operating expenses that could have been met had the disaster not occurred, including fixed debts, payroll, accounts payable, and other bills. Your application will need to show economic injury through financial documentation and current business financial statements.
Mitigation Assistance
Looking toward future protection, Mitigation Assistance loans help fund improvements that can protect your property against similar damage in future disasters. These loans can be used in conjunction with Physical Damage Loans to implement protective measures based on your specific risks and needs. You’ll need to provide a detailed mitigation plan and cost estimates for your proposed improvements.
To apply for any of these SBA disaster assistance programs, visit SBA.gov/disaster-assistance. The website provides a streamlined application process where you can check eligibility, submit required documentation, and track your application status through the SBA portal.
Important Tax Relief Options
Extended Filing Deadlines
For areas affected by Hurricane Helene, the IRS has extended various tax deadlines to May 1, 2025. This extension applies to 2023 individual and business tax returns, quarterly estimated tax payments, quarterly payroll and excise tax returns, and returns for calendar-year partnerships, S corporations, corporations, and tax-exempt organizations.
Claiming Disaster Losses on Your Tax Return
The IRS provides specific guidelines for deducting qualified disaster-related casualty losses on your tax return. Your deductible loss amount is calculated by taking the lesser of your property’s adjusted basis or its decline in fair market value, then subtracting any insurance reimbursements received or expected. From this amount, you’ll subtract $100 per casualty event and 10% of your adjusted gross income (AGI).
Understanding that calculating these losses can be complex, the IRS has set up “safe harbor” methods that offer simplified ways to determine loss amounts without requiring detailed appraisals or documentation. These methods can help streamline the process of claiming your losses while ensuring compliance with IRS requirements. For detailed information about safe harbor methods and calculating casualty losses, visit the IRS Disaster Assistance and Emergency Relief for Individuals and Businesses page.
Accessing Retirement Funds
Special provisions for federally declared disaster areas allow for greater flexibility in accessing retirement funds. You can withdraw up to $22,000 per declared disaster from your retirement accounts without incurring the typical 10% early withdrawal penalty, even if you’re under age 59½. These withdrawals must be taken within 179 days of the disaster declaration date. To provide added financial flexibility, you can spread the tax payments on these distributions over three years, or you can choose to repay the distributions within the three-year period for tax-free rollover treatment.
For those with workplace retirement plans such as 401(k)s, you may be eligible to borrow up to $100,000 or 100% of your account balance, whichever is less. These loans come with special repayment terms designed to provide relief during recovery.
Additional Resources
For more detailed information om these programs, visit:
This guide serves as a reference tool to help you understand available disaster relief options. For the most current information and specific program details, please review the resources linked above. Together, we’re building a solid foundation for recovery and future success.