On July 10, the U.S. Senate unanimously passed H.R. 517, the Filing Relief for Natural Disasters Act, allowing the U.S. Department of the Treasury and the IRS to grant tax relief when a governor declares either a disaster or state emergency. The bipartisan bill was unanimously passed in the House at the end of March and was signed into law by President Donald Trump on July 24.
Historically, the Treasury and the IRS have had the authority to postpone tax filing deadlines to taxpayers affected by federally declared disasters. They have been able to issue postponements for deadlines such as filing federal tax returns, paying federal taxes, making retirement plan contributions, and tax assessments and collections. However, this authority did not extend to state-level emergencies.
With the passage of the Filing Relief for Natural Disasters Act, the Treasury, in consultation with the Federal Emergency Management Agency (FEMA), is now authorized to extend relief to impacted taxpayers as soon as a qualified disaster or state of emergency is declared at the state level.
The legislation defines a qualified state-declared disaster as any natural catastrophe (such as tornadoes, storms, high water, wind-driven water or drought ) or, regardless of cause, any fire, flood, or explosion in any part of the state that causes damage of sufficient severity and magnitude to warrant a request to postpone federal tax deadlines. The bill enables the Treasury to postpone federal tax deadlines for taxpayers affected by a qualified state-declared disaster upon written request by a 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.
The Filing Relief for Natural Disasters Act also expands to 120 days from 60 days the current mandatory extension of federal tax deadlines under Sec. 7508(d) 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. All provisions of the legislation will apply to declarations made after the date the law is enacted.
Introduced in the U.S. House of Representatives in January of this year, the Filing Relief for Natural Disasters Act is cosponsored by Reps. David Kustoff, R-Tenn., and Judy Chu, D-Calif.
"I thank President Trump for signing my bill, the Filing Relief for Natural Disasters Act, into law," said Congressman Kustoff. "This new law provides critical relief for all Americans when tornadoes, hurricanes, fires, flooding and other calamities affect communities across the nation. When disaster strikes, the last thing families and businesses should have to worry about is missing a tax deadline or paying Uncle Sam. The Filing Relief for Natural Disasters Act will ensure that these victims have the flexibility they need to rebuild and recover."
Most recently in Tennessee, the IRS had announced tax relief for individuals and businesses in the entire state affected by severe storms, straight-line winds, tornadoes and flooding that began on April 2. That relief postpones various tax filing and payment deadlines occurring from April 2, 2025, through Nov. 3, 2025.
Prior to that, Gov. Bill Lee declared a state of emergency through Executive Order 105 in September 2024 due to Hurricane Helene. Then-President Joe Biden also declared a state of emergency for East Tennessee due to Helene. The president’s declaration triggered the Stafford Act, allowing for potential tax relief. The IRS then announced disaster tax relief for all individuals and businesses affected by Hurricane Helene to any area designated by FEMA. A total of 14 counties in Tennessee have qualified for that relief since it was first issued.
“Tennesseans have been impacted by several natural disasters in recent years, and TSCPA is extremely grateful for Representative Kustoff’s leadership in introducing the Filing Relief for Natural Disasters Act and advocating for the needs of disaster victims in our state and all across the country,” said TSCPA President/CEO Kara Fitzgerald, CPA, CGMA, CAE. “The passage of this legislation will provide significant relief to taxpayers who are affected by disasters as well as our members who serve them.”
To read the full H.R. 517, visit https://bit.ly/congresshb517. To learn more about TSCPA’s disaster recovery resources, visit https://www.tscpa.com/disaster-recovery.
References
https://bit.ly/congresshb517
https://bit.ly/kustoffrelease
https://bit.ly/jofataxrelief
https://bit.ly/irsnov3
https://bit.ly/temahelene
https://bit.ly/bidentn
https://bit.ly/irstnhelene
This article was originally published in the September/October 2025 Tennessee CPA Journal.
