Don't Mess With Taxes

If the White House goes through with its plan to phase out the current federal disaster relief program, states will have to cover more costs of storm damages, like those in Keaton Beach, Florida, when Hurricane Helene made landfall there on Sept. 25, 2024. (Photo: Florida National Guard)

Forecasters from both the federally-funded National Hurricane Center and private weather services predicted the 2025 hurricane season would be active.

That might well happen since the tropical season that started June 1 runs through Nov. 30. But so far, we’re off to a quiet start.

Fewer than forecast storms always are welcome. That’s particularly true now that the Trump administration has announced it’s going to change the way Uncle Sam deals with major disaster recovery efforts.

FEMA phaseout: Last week, Donald J. Trump said he planned to start phasing out the Federal Emergency Management Agency (FEMA)after this hurricane season, and that states would receive less federal aid to respond to natural disasters.

The way those federal disaster relief funds would be distributed also will change, according to Trump. The money will be doled out directly from the president's office.

You have been warned blue states.

Of course, changes to FEMA could, well, change. Trump can be, shall we say, mercurial when it comes to decisions. Plus, you can be sure that all state lawmakers from both sides of the aisle will be letting the White House know how they feel about the shift of disaster recovery costs to their treasuries.

But for now, the FEMA realignment, along with some current non-tropical disaster tax relief, earn this weekend’s Saturday Shout Outs.

Storm-battered TX, OK, MO, MS get tax relief: Since this is a tax blog, I’m starting with the Internal Revenue Service’s announcements last week that individual and business taxpayers in parts of Texas, Oklahoma, Missouri, and Mississippi who sustained damages from serious storms in March now get tax relief.

The action includes, for all three, a new Nov. 3, 2025, filing and payment deadline for certain tax obligations.

For affected individual taxpayers in parts of the three states, the Nov. 3 deadline applies to their personal income tax returns and payments that were due on April 15.

The early November deadline also applies to these individuals’ 2024 tax year contributions to IRAs and health savings accounts.

And the extended deadline also applies to the estimated tax payments normally due on April 15, June 16, and Sept. 15, 2025.

You can find specifics on the state disasters and the dates to which the storm relief applies, as well as the affected counties, and relief for business filers in the shout outs to the IRS’ official tax relief announcements for taxpayers impacted by —

• severe storms and flooding in Texas;
• wildfires and straight-line winds in Oklahoma; 
• severe storms, straight-line winds, tornadoes, and wildfires in Missouri; and
• severe storms, straight-line winds, tornadoes, and flooding in Mississippi.

UPDATE, June 25, 2025: The IRS today granted more Missouri taxpayers tax relief for severe storms, straight-line winds, tornadoes, and flooding that began in the Show Me State on May 16. These filers also have until Nov. 3 to meet various tax filing and payment deadlines. This includes estimated tax payments normally due on June 16 and Sept. 15.

FEMA's future: Now to what some people are saying about the Trump plan to change FEMA.

Trump says FEMA to be wound down after hurricane season, writes Reuters reporter Nathan Layne. His coverage of the briefing where the proposal was discussed also cites Department of Homeland Security (DHS) Secretary Kristi Noem’s assessment that FEMA, which was moved to DHS after the Sept. 11, 2001, terror attacks, "fundamentally needs to go away as it exists" and that governors were being encouraged to work together to respond to disasters.

Florida has the most to lose if Trump makes good on FEMA threat, writes Brandon Girod in the Pensacola News Journal. Girod notes that the move would put many conservative-led states, especially Florida, in a precarious situation. He cites statistics that support that view: “More than 41% of all hurricanes that have made landfall in the United States between 1851-2023 have impacted Florida, according to data from the National Oceanic and Atmospheric Administration.”

Trump wants to 'phase out' FEMA, Kentucky Gov. Andy Beshear warns it's a 'big mistake' reports Ian Hardwitt for Louisville’s ABC television affiliate WHAS. The Bluegrass State’s Democratic governor says Trump's plans would leave Kentucky with fewer resources and less ability to respond quickly.

Hurricane Helene’s Staggering Costs Test States’ Fiscal Resilience, writes Jad Maayah, a senior associate for The Pew Charitable Trusts’ managing fiscal risks project. His article examines how North Carolina’s response to that storm highlights disasters’ impact on state budgets and state strategies to address risks.

Maayah’s article also underscores the added challenges states will face if FEMA operations and federal relief programs are dramatically altered.

“Disasters are a nationwide challenge; 40 U.S. states received federal major disaster declarations in 2024 alone,” Maayah writes. “As storms increase in frequency and severity, states must take on the vital role of safeguarding their budgets against mounting recovery costs.”

You also might find these items of interest:

• Hurricane season starts June 1. Get ready now.
• Considerations in making a major disaster tax claim
• A pre-disaster inventory can pay off when filing insurance or tax claims
• Storm Warnings: A collection of special pages with advice on preparing for, recovering from, and helping those affected by disasters

Updated June 15, 2025, to add Mississippi

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