In association with such a declaration, individuals and businesses in the affected area may qualify for tax relief from the Internal Revenue Service (IRS). According to FEMA, such tax considerations may include:

If your property is damaged or destroyed from a declared disaster (called a casualty loss), you may deduct that loss on the federal income tax return for the year in which the casualty occurred. Or, you can deduct the loss on the tax return for the preceding tax year. You may choose which of those two tax years provides the better tax advantage, but any reimbursement you receive from insurance cannot be deducted from your taxes. Remember, this does not include normal wear and tear or progressive deterioration, says the IRS.
The IRS can accelerate refunds due to taxpayers in a declared disaster area. This can be helpful to individuals because a refund can be a quick source of cash, does not need to be repaid and does not need an Individual Assistance declaration, according to FEMA.
The IRS may also postpone certain tax filing deadlines for taxpayers who reside or have a business within the disaster area.

For more information about tax relief, visit the following government pages:

Please note that the offering insurance company or its agents and representatives cannot give legal or tax advice. The brief discussion of taxes on this page may not be complete or current. The laws and regulations are complex and subject to change. For complete details consult your attorney or tax advisor.