Your Business and Hurricane Season 2026: The Tax and Financial Checklist to Complete Before June 1

Atlantic hurricane season officially begins on June 1. For many business owners in Puerto Rico, that date passes almost unnoticed amid day-to-day pressures — until a storm arrives and they discover they did not have what they needed in order.

This article is not about stocking water and flashlights. It is about the part nobody explains: what documents you need ready, which insurance coverages actually protect your business finances, how losses are reported if a disaster occurs, and which tax obligations keep running even when your business is closed.

Why June 1 matters for your business

Puerto Rico does not only experience hurricane season as a weather event. It also experiences it as an economic and tax event. After Hurricane María in 2017 and Fiona in 2022, the Department of the Treasury (Hacienda) issued special administrative determinations, the IRS postponed filing dates, and thousands of businesses had to navigate a loss-claim process they were not prepared for.

Preparing before June 1 is not pessimism. It is what separates a business that recovers from one that does not.

Part 1: Documents you need backed up now

The most common problem after a disaster is not physical loss. It is not being able to prove what was lost.

Before the season starts, verify that you have digital copies (in the cloud or on a device off-site) of the following:

Tax documents:

• Returns for the last 3 years (individual and business)
• Latest SURI account statements
• Records of IVU payments, withholdings, and payroll
• Any active payment plan with Hacienda

Business documents:

• Articles of incorporation, Department of State registration
• Current licenses (municipal, Hacienda, health, etc.)
• Lease agreements or property documents for the premises
• Contracts with active suppliers and key clients

Financial records:

• Financial statements for the last 12 months
• Inventory documented with current values
• Record of business equipment and assets (with photos or video)
• Invoices for major purchases (equipment, improvements, machinery)

Insurance policies:

• All current policies, with adjuster contact numbers

A video record of your premises and equipment — recorded with a visible date — can be the difference between an insurance claim approved quickly or disputed for months.

Part 2: Business interruption insurance — the coverage most owners do not have

Most businesses in Puerto Rico have some type of property insurance. It covers physical damage to the premises, inventory, and equipment. But that insurance does not cover what happens while the business is closed.

Business interruption insurance (also called Business Interruption or Business Income) is designed exactly for that: to cover lost income and operating expenses that keep running — payroll, rent, contracted utilities — during the period the business cannot operate due to a covered event, such as a hurricane.

It also includes extra expenses you incur to keep operating: renting temporary space, paying overtime to employees during the transition, or buying emergency replacement equipment.

What you should review in your current policy:

• Do you have business interruption coverage? Many commercial policies include it as an optional component — verify whether yours is active.
• What is the maximum coverage period? Some policies cover 3 months, others up to 12.
• Which events are covered? Hurricanes are almost always included, but flooding may require a separate policy.
• What is the deductible and how is lost income calculated?

If you do not have this coverage, or are not sure whether you do, now is the time to call your insurance agent — before June 1, not after.

Part 3: How disaster losses are reported in Puerto Rico

If a hurricane occurs and your business suffers damage, there are two loss deduction systems: Puerto Rico’s Hacienda and the federal IRS. They work differently and it is important to understand both.

At Puerto Rico’s Department of the Treasury (Hacienda)

The Puerto Rico Internal Revenue Code allows deducting fortuitous business losses — damage to property, equipment, inventory — that were not compensated by insurance. For this to apply, the area must have been designated a disaster zone by the Governor.

Documentation requirements are strict: you must submit evidence of the loss (photos, invoices, repair estimates) with your return, and in some cases prove that you claimed available assistance programs. If Hacienda has issued special measures for the hurricane — as with Fiona — they may also postpone filing dates and temporarily suspend penalties.

At the federal IRS

For Puerto Rico taxpayers with federal obligations, the IRS has a similar mechanism. When the President declares a major disaster in Puerto Rico, the IRS activates automatic relief for those in designated areas, including extension of filing and payment dates. Losses are claimed on Form 4684 (Casualties and Thefts).

An important detail: in a federally declared disaster, you may choose to claim the loss on the return for the year the disaster occurred or on the prior year’s return, giving you some flexibility to maximize the tax benefit based on your income situation.

What you should understand about both systems

Losses not compensated by insurance are deductible. Those covered by insurance are not. That is why the previous point about having the right coverage matters so much: well-structured insurance pays for the damage and lets you operate; poorly structured insurance leaves you with a partially deductible loss but without the cash flow to recover.

Part 4: Tax obligations that keep running even when you are closed

One of the costliest mistakes after a disaster is assuming that because the business is closed, tax obligations are paused. They are not — unless Hacienda or the IRS have issued specific relief measures for that event.

These obligations typically keep running:

Payroll and withholdings: If you have employees, withholdings and payroll deposits (FICA, FUTA, SUTA, income tax withholding) still have due dates. Hacienda and the IRS usually issue extensions after a declared disaster, but you must watch official announcements.

IVU (sales tax): If you were an active merchant at the time of the hurricane, your IVU registration remains active. Monthly filings have fixed dates. In past events, Hacienda has postponed these dates, but the postponement is not automatic — it is announced formally.

Estimated tax payments: If you make quarterly estimated tax payments, those dates may also be affected by emergency extensions.

Active payment plans: If you had an active payment plan with Hacienda at the time of the hurricane, defaults caused by the disaster have been forgiven in past events, but you must request it formally.

The practical rule: after any event, check the Hacienda portal and the IRS website immediately to identify active relief measures. Do not assume they applied automatically.

Quick checklist: before June 1

Check off each step as you complete it. Your progress is saved automatically on this device.

A note on this year’s forecast

Climate models for the 2026 season point to below-average activity, partly due to possible El Niño development, which tends to reduce storm intensity in the Atlantic. That is good news, but not a reason to let your guard down: a single storm on the right track can affect Puerto Rico regardless of overall seasonal activity.

What changed after María and Fiona is that many businesses learned these lessons the hard way. The opportunity now is to learn beforehand.

The information in this article is educational and general in nature. Applicable tax rules in a disaster depend on official communications from Hacienda and the IRS in response to the specific event. For your particular situation, always consult a professional.