IRS Offers Tax Extensions and Fuel Penalty Relief for Hurricane Milton Victims

A man walks past vehicles flooded in the water as the streets of the Southeast Seminole Heights section of Tampa due to Hurricane Milton in Florida on Oct. 10, 2024. Bryan R. Smith/AFP via Getty Images

The Internal Revenue Service (IRS) has announced relief for taxpayers affected by Hurricane Milton, offering leniency on dyed diesel fuel penalties and extending tax deadlines for businesses and individuals across Florida.

In a series of announcements on Oct. 11, the IRS said it is applying the relief in a bid to ease the financial burden on those facing disruptions due to the storm, which caused widespread flooding, power outages, infrastructure damage, and loss of life.

Individuals and businesses in all 51 counties of Florida now have until May 1, 2025, to file their federal tax returns and make necessary tax payments, the IRS said in one of the announcements. The tax relief applies to those who were already extended deadlines due to earlier hurricanes including Debby and Helene, as well as to those newly affected by Hurricane Milton.

The relief includes extended filing deadlines for 2024 individual and business tax returns, quarterly payroll and excise tax returns, as well as estimated tax payments. Penalties for failure to make payroll and excise tax deposits due after Oct. 5, 2024, and before Oct. 21, 2024, will be abated if the deposits are made by Oct. 21.

In conjunction with federal tax relief, taxpayers in federally declared disaster areas may also qualify for disaster-related loss deductions, potentially resulting in a larger tax refund for damages and losses. Affected individuals can claim disaster losses on either their 2024 tax return or their 2023 return. The IRS has extended the deadline for making this election to Oct. 15, 2025.

In addition to the tax deadline extensions, the IRS announced in a separate notice that it is offering relief on dyed diesel fuel penalties to assist businesses affected by fuel shortages or logistical challenges caused by Hurricane Milton. Normally, the use of dyed diesel on highways is subject to significant penalties, including a base penalty of $1,000 or $10 per gallon of fuel used, whichever is greater. This relief temporarily removes that burden for those who must resort to using dyed diesel in highway vehicles during the recovery period. The relief begins on Oct. 9 and will remain in effect until Oct. 30.

The IRS noted that this relief is available to any person or entity that sells or uses dyed diesel in vehicles suitable for highway use, provided they pay the standard federal excise tax of 24.4 cents per gallon, which is normally applied to undyed diesel fuel used on highways. The agency will also suspend penalties for the failure to make semimonthly deposits of the tax for dyed diesel fuel during this period.

Affected taxpayers who do not have an IRS address of record located in the disaster area but are impacted because their necessary records are in the affected region are also eligible for relief.

Hurricane Milton made landfall on Oct. 9 at Siesta Key, Florida, as a Category 3 storm, cutting a destructive path across Florida that spawned more than a dozen tornados, killed at least 10 people, and left millions without power.

Although Milton proved deadly, FEMA Administrator Deanne Criswell said that the state had avoided the “worst-case scenario.”