Congress has passed a bill giving taxpayers who have been affected by natural disasters some extra time to file a claim for a tax credit or refund.
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The bipartisan bill, known as H.R. 1491, the Disaster Related Extension of Deadlines Act, was sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, with the support of the American Institute of CPAs.
It extends the time for filing a claim for credit or refund (known as the “lookback period”) by the disaster relief postponement period afforded to taxpayers affected by major disasters. Previously, taxpayers impacted by disasters effectively have less time to make a refund or credit claim than those who are not affected because the deadline for refund or credit claims was based on the original filing deadline and was not extended by the filing and payment disaster relief postponement. The Disaster Related Extension of Deadlines Act gives taxpayers who have been affected by disasters more opportunities to meet their tax obligations without extra confusion, stress and anxiety.
It requires the Internal Revenue Service to treat the postponement of the federal tax return deadline due to a federally declared disaster or certain other events as an extension of such a deadline for purposes of calculating the limit on a tax refund, according to a summary. The IRS’s deadline for sending certain notices would take into account such a postponement.
Under current law, a tax refund claim needs to be filed within three years of the date that the federal tax return is filed, although some exceptions apply. The tax refund amount generally is limited to federal taxes paid within the three years preceding the tax refund claim plus any extension of the federal tax return deadline (that is, the lookback period). The postponement of the federal tax return deadline is not an extension for purposes of the lookback period, so certain tax payments made before the federal tax return is filed may be excluded from the lookback period. Under the bill, a federal tax return deadline postponed due to a federally declared disaster or certain other events must be treated as an extension of such a deadline for purposes of the lookback period. Under current law, the IRS is required to mail a notice and demand for tax payment within 60 days of an assessment but not before the tax payment due date. The bill says the tax payment due date should include the postponement of the tax payment deadline due to a federally declared disaster or certain other events.
The AICPA has advocated for the bill and expressed strong support for it and other disaster-related legislation in a February 2025 letter to leadership of the House Ways and Means Committee. The bill passed the House in April and was sent to the Senate, where it passed last week.
“We applaud Congress for recognizing the importance of this bill for many Americans by passing this legislation that will now be signed by the President,” said Daniel Hauffe, senior manager for tax policy and advocacy with the AICPA, in a statement Thursday. “Taxpayers affected by disasters are afforded additional time to comply with tax obligations because of the devastating real-life consequences of natural disasters, and now they will receive the same period of time to make claims for credit or refund as all other taxpayers.”
