Hurricane Helene made landfall on September 26 and quickly became one of the deadliest hurricanes in U.S. history. The devastation and loss have been immeasurable. And many people are now bracing for the impacts of Hurricane Milton, currently a Category 4 storm, approaching Florida’s west coast.
Unfortunately, as millions work to recover and deal with these disasters, dangerous misinformation is sweeping through social media and other outlets. This false information surrounds the availability of FEMA relief and other disaster assistance including tax implications.
Let’s focus on the facts of some of the main myths and rumors surrounding hurricane relief. If you or someone you know has been impacted, relying on accurate information is crucial to getting much-needed funds and resources.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
FEMA assistance rumors
One of the most common misconceptions involving Hurricane Helene involves FEMA Assistance. Former President Trump has been part of the problem spreading false information claiming FEMA assistance isn’t available.
For example, Trump, who is running for President of the United States, falsely stated at rallies and on social media that FEMA funds were diverted to support immigrants and that FEMA is only offering small amounts of aid.
MYTH: FEMA has run out of money for Helene disaster assistance and those in need will only receive $750.
FACT: FEMA has confirmed that it has sufficient funds for immediate response and recovery needs. You should apply for FEMA assistance if you’re eligible and need it. (The agency has a portion of its site dedicated to debunking hurricane rumors.)
Also, while FEMA may provide an initial $750 payment for immediate news, that amount is NOT the limit for assistance.
A range of aid types are available based on need and eligibility including temporary housing assistance, home repair grants, and other assistance. This leads us to a related myth about whether accepting FEMA assistance impacts your tax liability.
MYTH: FEMA assistance is taxable income and will impact other government benefits like Social Security, Medicaid, or SNAP.
FACT: FEMA disaster grants are not considered taxable income. So, accepting FEMA aid won’t affect your federal tax liability and does not have to be reported on your federal tax return.
Also, benefits from other federal programs like Social Security, Medicare, Medicaid, or Supplemental Nutrition Assistance Program (SNAP) are separate and aren’t impacted by your FEMA aid.
Tax relief for hurricane victims
MYTH: All hurricane victims automatically receive a tax deadline extension.
FACT: While many hurricane victims in federally declared disaster areas receive automatic tax deadline relief from the IRS, that might not include ALL victims. Extended filing deadlines, penalty relief, or other modifications may be available based on where you live or where you have impacted records or businesses.
Always check the IRS disaster relief website or consult a tax professional for relief measures that apply to you. Kiplinger also keeps a running list of states with IRS tax deadline extensions.
Another related myth deals with claiming disaster losses on your tax return.
MYTH: Disaster losses can be claimed on any tax year’s return.
FACT: Due to the Tax Cuts and Jobs Act (TCJA), the casualty loss deduction is reserved for losses resulting from federally declared disasters. Generally, disaster losses are deductible on the tax return for the year the loss occurred or on the previous year’s return.
According to the Taxpayer Advocate Service, “Taxpayers may deduct personal property losses not covered by insurance or other reimbursements.”
Note: Your state may also offer casualty loss deductions. Be sure to check state-specific rules, as they may vary.
Hurricane donations
During times of crisis, it’s natural for people to want to help. However, scams and misinformation about charitable giving and tax deductions can create confusion.
MYTH: All donations to hurricane relief efforts are tax deductible.
FACT: While many charitable contributions are tax-deductible for those who itemize deductions, only donations to qualified organizations can be claimed for the deduction. So giving directly to individuals, for example, is not tax-deductible.
Always verify that an organization is a legitimate, qualified tax-exempt organization, before you give or claim a donation on your tax return.
Navigating hurricane relief: Focus on the facts
As communities unite to recover and rebuild following devastating Hurricanes and other disasters, having accurate information is crucial. Misinformation can rob people of valuable sources and stir unnecessary confusion about financial aid, other benefits, and even taxes.
Always verify any information you hear through official channels like FEMA (fema.gov) and the IRS (irs.gov) or seek guidance from a trusted and qualified tax professional or financial advisor.
How to Apply to FEMA? Apply online at DisasterAssistance.gov, use the FEMA mobile app, or call the FEMA Helpline at 800-621-3362.
More on Hurricane Relief
-
Best 529 Plans of 2024Check out the best 529 plans of 2024 and find the best plan for your child or grandchild’s college savings.
-
Harris vs Trump on Medicare Drug Price Negotiations: Fact CheckA fact check of what the Trump and Biden-Harris administrations did around Medicare drug price negotiations.
-
Want to Turn Your Tax Bill Into a Refund? What to Do NowA few easy steps can help you avoid writing a check to the IRS. And if your most recent refund was a whopper, you might want to consider a few adjustments.
-
Election Could Reshape Opportunity Zones and 1031 ExchangesTrump and Harris have divergent approaches to qualified opportunity zones and 1031 exchanges. See how each could fare under their administrations.
-
Five Windows of Opportunity for Roth ConversionsWhen you convert a traditional IRA to a Roth IRA matters if you want to limit how much you pay in taxes.
-
When Should Retirees Consider a Donor-Advised Fund?Charitable giving in retirement isn't right for everybody. But in certain situations, a tax-efficient donor-advised fund (DAF) may be well worth considering.
-
This Trust Strategy Can Reduce Your Taxes Big-TimeUpstream basis planning can help younger wealthy people pay less taxes on highly appreciated assets if they appoint an aging relative as a trust beneficiary.
-
IRS Solar Tax Credit Payouts Soar as Scams Target HomeownersClean Energy Clean energy tax credits are paying off for many, but experts warn of increasing scams.
-
Arizona Pickleball Taxes? What You Need to KnowState Tax The popular sport is sparking debate in some communities. Could you be subject to ‘pickleball taxes’?
-
Five Tax Strategies to Preserve Your Retirement SavingsFrom Roths to HSAs to creative Social Security timing, retirees have many options to minimize their taxes. You might be surprised what a difference it can make.
