Whitley Penn Tax Alert:
IRS Announces Tax Relief for Victims of Texas Floods
July 17, 2025
The IRS announced tax relief for taxpayers that were affected by severe storms, straight-line winds, and flooding in Texas that began on July 2, 2025 (TX-2025-4).
The relief is available for individuals, businesses, and tax-exempt organizations located in the following Texas counties: Burnet, Kendall, Kerr, Kimble, Menard, San Saba, Tom Green, Travis, and Williamson.
Affected taxpayers have until February 2, 2026, to file various federal tax returns and make federal tax payments that were originally due during the disaster period that began on July 2, 2025, including:
- Subchapter S corporations and calendar-year partnerships that filed valid requests extending the due date of their returns to September 15, 2025.
- Individuals, businesses, and tax-exempt organizations that filed valid requests extending the due date of their returns to October 15, 2025.
- Calendar-year corporations that filed valid extensions extending the due date of their returns to October 15, 2025.
- Calendar-year tax exempt organizations that filed valid requests extending the due date of their returns to November 17, 2025.
- Quarterly estimated tax payments originally due on or after July 2, 2025, through February 2, 2026.
- Quarterly payroll and excise tax returns due July 31, 2025, October 31, 2025, and January 31, 2026.
- Certain time-sensitive acts required to be performed on or after July 2, 2025, through February 2, 2026.
Note that any payment that was due with an extension request that was not paid at the time it was originally filed is not eligible for this relief.
Other relief that is available to affected taxpayers includes:
- Taxpayers that receive late filing or late payment penalty notices due during the postponement period can contact the IRS to request abatement.
- Taxpayers that have executed installment agreements with the IRS may continue to receive payment notices, but missed payments during the postponement period will not cause a default. Note that interest and late payment penalties related to the installment agreement will continue to accrue.
- Taxpayers in the disaster area may elect to claim casualty losses on either their 2024 or 2025 federal income tax returns and will have an additional period of time in which to make the election.
- Various provisions for retirement plan payments may apply, including the availability of special rules for plan distributions, exemption from early withdrawal penalties, and the ability to spread distribution income over a three-year period.
Affected taxpayers include individuals and businesses residing or located in the disaster area. The IRS will automatically identify taxpayers residing or located in the disaster area to apply filing and payment relief. The relief also applies to workers affiliated with a recognized government or philanthropic organization assisting in the relief efforts and individuals that were killed or injured visiting the disaster area. Affected taxpayers not residing or located in the disaster area, including those that have tax records located there, should call the IRS disaster hotline at (866) 562-5227 to request relief.
Disclaimer: This tax alert is designed only to provide general information regarding its subject matter and should not be construed as tax, accounting, or legal advice to any specific person or entity. The statutes, authority, or other law discussed or cited in the alert are subject to change and Whitley Penn assumes no obligation to update the reader of any changes. Any advice or opinion regarding the application of the subject matter for a specific person or entity should be provided by a competent professional tax advisor based on the application of the appropriate law and authority to the facts and circumstances applicable to that person or entity.
Whitley Penn is continually monitoring tax and economic developments and will send out additional alerts in the future. In the interim, please contact your Whitley Penn tax advisor if you have any questions or require any additional information.