As North Carolina continues its recovery efforts following the devastating impact of Hurricane Helene, important tax relief measures have been introduced to aid residents and businesses affected by the storm. Both the Internal Revenue Service (IRS) and the North Carolina Department of Revenue have announced extensions and relief options that may affect your 2023 tax filings. Here’s an overview of what you need to know.
Federal and State Tax Filing Extensions
For residents and businesses impacted by Hurricane Helene, the IRS has extended the federal tax filing deadline to May 1, 2025. This extension is designed to provide additional time for taxpayers in disaster-affected areas to organize and manage financial records disrupted by the storm.
Additionally, the North Carolina Department of Revenue has enacted state-specific tax relief measures through the Disaster Recovery Act of 2024, signed into law on October 10, 2024. These provisions are aimed at helping taxpayers navigate their state tax responsibilities more effectively during this recovery period.
Disaster Relief for Designated North Carolina Counties
Tax relief measures apply to individuals and businesses in counties designated as major disaster areas under the Stafford Act. Affected counties in North Carolina include:
Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Catawba, Clay, Cleveland, Gaston, Haywood, Henderson, Jackson, Lincoln, Macon, Madison, McDowell, Mecklenburg, Mitchell, Nash, Polk, Rutherford, Swain, Transylvania, Watauga, Wilkes, and Yancey.
If you live in or operate a business in any of these counties, you may qualify for relief programs such as extended filing deadlines, waived interest, and other tax support.
Eligibility for Interest Relief in North Carolina
To assist taxpayers further, the North Carolina Department of Revenue is offering interest relief for certain taxes, contingent on the type of tax and the location of the taxpayer. The categories include:
- Income and Franchise Tax: Available to residents and businesses in eligible disaster counties.
- Sales and Use Tax: For businesses with their principal place of business in a disaster-affected county.
- Withholding Tax: Targeted toward businesses in disaster-affected counties that have outstanding withholding tax obligations.
Eligible taxpayers will have interest waived on unpaid income, franchise, sales, and withholding taxes for returns due from September 25, 2024, through May 1, 2025. This includes:
- Income and Franchise Tax Returns: Interest waivers apply to corporate, individual, partnership, and estate tax returns.
- Sales and Use Tax Returns: Waived interest for September and October 2024 monthly returns, as well as third-quarter 2024 payments.
- Withholding Tax Returns: Waived interest on payments for September and October 2024.
In addition, eligible partnerships and S corporations have until May 1, 2025, to opt to pay North Carolina income tax at the entity level for the 2023 tax year.
How to Navigate Tax Relief Options After a Disaster
Managing tax obligations after a natural disaster can be overwhelming. Here are some practical steps to take:
- Assess Your Eligibility: Determine if your county is listed among those eligible for relief. Review the types of taxes you may qualify for relief on, such as income, sales, or withholding taxes.
- Organize Financial Documents: If your records were lost or damaged in the disaster, begin the recovery process as soon as possible. Contact financial institutions, insurance companies, or your tax professional to replace necessary documents.
- Consult with Tax Professionals: Seek guidance from tax experts familiar with disaster relief provisions. They can assist with the claims process, file returns under extended deadlines, and ensure compliance with both federal and state requirements.
How DHW Can Help You
At DHW, we understand the unique challenges of managing tax filings following a disaster. Our team of tax professionals is here to:
- Assist with recovering lost or damaged documents.
- Determine your eligibility for federal and state tax relief.
- Ensure timely and accurate filing under the extended deadlines.
If you have questions or believe you qualify for these relief measures, please reach out to us. We are committed to providing the support and expertise you need during this challenging time.