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IRS Provides Some Relief for Victims of Hurricane Ian Thumbnail

IRS Provides Some Relief for Victims of Hurricane Ian

Disasters, such as Hurricane Ian, come with a major toll to an area's economy. Here's what the Government does to relieve the desperate and offer aid.

With aid from the Government, nations in economic turmoil have a chance to bounce back.


If you are a victim of Hurricane Ian, you may be eligible for some relief when it comes to your retirement accounts.  

The IRS has postponed certain tax deadlines for individuals affected by Hurricane Ian until February 15, 2023. Some of these postponed deadlines apply to retirement accounts. For example, the relief includes more time to complete certain acts such as IRA rollovers or recharacterizations, correction of certain excesses and making contributions.  

While the IRS can grant some tax relief to those affected by Hurricane Ian, its ability to do so is limited. There is some relief that the IRS does not have the power to give. For example, it cannot exempt early retirement account distributions from the 10% penalty. Such a change would require a change in the law and can only be made by Congress.  

Congress has passed such legislation in the past for certain victims of Hurricanes Harvey, Irma, and Maria and the California wildfires. Similar legislation was also passed back in 2005 to help the victims of Hurricane Katrina and in 2020 for persons affected by COVID-19.  

However, legislation giving retirement account relief to disaster victims is not always a sure thing. Congress gave no such relief to victims of Hurricane Sandy in 2012. Similar proposed legislation for victims of the superstorm that struck the northeast stalled in Congress and failed to become law when some members from the south and the Midwest objected, citing budget concerns.  

There have been several proposals to make penalty-free disaster distributions a permanent part of the tax code. For example, the bipartisan Disaster Retirement Savings Act proposed in 2021 included provisions granting relief from the 10% penalty. These provisions would be triggered automatically if the President issues a federal disaster declaration. These proposals may gain some traction in Congress and could be part of a larger retirement package that may come later this year, which is often referred to as SECURE 2.0.

By Sarah Brenner, JD
Director of Retirement Education
Ed Slott and Company, LLC

Copyright © 2022, Ed Slott and Company, LLC Reprinted from The Slott Report, 10/12/22, with permission. https://www.irahelp.com/slottreport/irs-provides-some-relief-victims-hurricane-ian, Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Chris Cordoba, founder of California Retirement Advisors, is a member of Ed Slott's Master Elite IRA Advisor Group. 
Investment advisory services offered through Mutual Advisors, LLC DBA California Retirement Advisors, a SEC registered investment adviser. Securities offered through Mutual Securities, Inc., member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. CA Insurance license #0B09076. This content is developed from sources believed to be providing accurate information and provided by California Retirement Advisors. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. California Retirement Advisors, nor any of its members, are tax accountants or legal attorneys and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.