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Victoria Bogdanovich CPAVictoria Bogdanovich CPA
Victoria Bogdanovich CPAVictoria Bogdanovich CPA
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Congress Passes Act Allowing Tax Relief When a State Declares Disaster

Congress Passes Act Allowing Tax Relief When a State Declares Disaster

October 20, 2025 Posted by Victoria Bogdanovich Tax Updates

Legislation passed by Congress will allow the IRS to grant tax relief when a governor declares either a disaster or state emergency rather than waiting for a federal disaster declaration, which may happen weeks after the state acts.

The Senate on Thursday passed H.R. 517, the Filing Relief for Natural Disasters Act, which passed the House in April. It now goes to President Donald Trump for his signature.

“The passage of this important legislation is a major win for taxpayers and tax practitioners across the country,” AICPA President and CEO Mark Koziel, CPA, CGMA, said in a statement. “When taxpayers are impacted by a disaster, the stress, anxiety, and emotional toll can be overwhelming — these people should be afforded every opportunity to meet their tax obligations without additional hardship. We applaud the actions taken by members of Congress to set aside political ideology and unanimously support taxpayers by providing disaster victims timely relief.”

Currently, the IRS has to wait for the federal government to declare a disaster before postponing federal tax deadlines, including (but not limited to) deadlines for filing federal tax returns, paying federal taxes, making retirement plan contributions, assessing taxes, and pursuing collections.

The new law will authorize the IRS to postpone such federal tax deadlines for taxpayers affected by a qualified state-declared disaster upon written request by the state’s governor or the authorities in the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. It will apply to declarations made after the date the law is enacted.

Also, the legislation will increase to 120 days from 60 days the automatic extension of such federal tax deadlines for certain relief workers, individuals killed or injured as a result of a federally declared disaster, and taxpayers whose principal residence, business, or tax records are located in a federally declared disaster area.

A qualified state-declared disaster is any natural catastrophe, fire, flood, or explosion that causes damage of sufficient severity and magnitude to warrant a request to postpone such federal tax deadlines.

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