Update Regarding Federal Disaster Tax Relief Act
If you had a loss due to natural disaster in the period between 2021 and the present, you may have previously reported this to GFC. However, due to the tax law at the time, this loss likely provided no tax benefit. Recent tax law (as outlined below) has introduced the possibility that GFC could amend your personal tax returns for any of those years in which a disaster loss was incurred, and claim a tax refund. Please reach out to your GFC tax team with information related to any natural disaster losses you incurred, and we will determine if it is beneficial to amend your tax returns.
New Law:
On Dec. 12, 2024, President Biden signed the Federal Disaster Tax Relief Act of 2023 (H.R. 5863) into law. This legislation provides long-awaited favorable tax provisions for disaster victims. The legislation allows for special provisions for qualified disaster-related personal casualty losses, including the elimination of the requirement that casualty losses must exceed 10% of an individual’s adjusted gross income (“AGI”) before becoming deductible. Normally, only the portion of casualty losses exceeding 10% of AGI can qualify for deduction. With the new legislation, the AGI threshold is eliminated, and each separate casualty is deductible once it exceeds a more modest $500 floor. This favorable treatment is available for all presidentially declared disasters occurring between Jan. 1, 2021, and Jan. 11, 2025 (if declared by Feb. 9, 2025). This includes major recent disasters such as Hurricane Helene, Hurricane Milton, Hurricane Ian and the wildfires in Hawaii and California, among many other disasters that occurred over the last four years.
