Katrina Tax Relief
What are the filing and payment deadlines for Hurricane Katrina victims?
There are two key dates –– Aug. 28, 2006, and Oct. 16, 2006.
To which returns does the Oct. 16 deadline apply?
Specifically, the IRS granted affected taxpayers in the counties listed below until Oct. 16, 2006, to file the following individual income tax returns:
2004 individual income tax returns, originally due on April 15, 2005, for which taxpayers obtained an extension of time to file until Oct. 15, 2005, and for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006. Payments accompanying 2004 individual returns were due on Oct. 15, 2005. Relief from interest and failure to pay penalties is limited to one year, from Aug. 29, 2005, through Aug. 28, 2006. Thus, if payments are not made by Aug. 28, 2006, interest and failure to pay penalties may apply.
2005 individual income tax returns, originally due on April 15, 2006, for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006. Interest and penalties will not apply to 2005 returns during this extension period.
Only the two individual income tax returns outlined above fall under the Oct. 16, 2006, deadline. (Affected taxpayers who need to file other types of returns, make other types of payments, or perform other time-sensitive acts should see information on the August deadline in the next FAQ.)
To claim this relief, affected taxpayers in the following counties and parishes should identify themselves by writing “Hurricane Katrina” in red at the top of their returns when filing or by calling the IRS Disaster hotline at 1-866-562-5227.
Affected taxpayers in the following counties may qualify for this relief:
Alabama counties: Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa and Washington.
Louisiana parishes: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Martin, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana.
Mississippi counties: Adams, Amite, Attala, Claiborne, Choctaw, Clarke, Copiah, Covington, Franklin, Forrest, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston and Yazoo.
What about the Aug. 28 deadline?
With the exception of the two individual income tax returns identified above, individual and business taxpayers in the parishes and counties of Louisiana, Mississippi, and Alabama have through Aug. 28, 2006, to file returns, make certain tax payments, and perform other time-sensitive acts that had a due date or extended due date on or after Aug. 29, 2005, and on or before Aug. 28, 2006. In addition, the failure to deposit penalty will be waived for taxpayers in these areas who are unable to make their deposits during this time period.
The postponement applies automatically to taxpayers in the following Louisiana parishes: Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles and St. Tammany.
The postponement also applies automatically to taxpayers in the following Mississippi counties: Hancock, Harrison and Jackson.
Affected taxpayers in the Alabama counties, and the other counties and parishes in Louisiana and Mississippi listed above also qualify for the postponement. However, those taxpayers must identify themselves as impacted. They can do this by writing “Hurricane Katrina” in red ink at the top of the return when filing, or by calling the IRS Disaster hotline at 1-866-562-5227.
Do I have more time to make my quarterly estimated tax payments?
Yes. Affected taxpayers in the areas listed above have until Aug. 28, 2006, to make these payments.
Do businesses have more time to make payroll tax deposits?
Yes. Affected businesses in the areas listed above have until Aug. 28, 2006, to make federal tax deposit (FTD) payments without incurring a late deposit penalty. This relief applies to any deposit originally due on or after Aug. 29, 2005.
This relief applies to employers who deposit social security, Medicare and federal income taxes withheld from employee paychecks. Businesses who deposit federal excise taxes are also eligible for this relief.
This relief is intended for taxpayers who are unable to meet their deposit obligations because their (or their service provider's) records, computers, or other essential supporting services were damaged, or essential personnel were injured, by the hurricane or any subsequent flooding. Thus, although the waiver applies to all affected taxpayers, taxpayers that are reasonably able to make their deposits are encouraged to do so.
Where can I learn more about what other "time-sensitive" actions receive relief?
The IRS is giving victims of Hurricane Katrina until Aug. 28, 2006 to perform other time-sensitive actions described in Treasury Regulation § 301.7508A-1(c)(1) (PDF 160KB, 10 pages) Revenue Procedure 2005-27 (PDF 492KB, 38 pages).
Where can I find general information about tax-related assistance for hurricane victims?
The IRS has issued a new publication to assist individual and business victims of Hurricanes Katrina, Rita and Wilma. It explains the tax law changes and relief provisions available to those affected by the hurricanes. The publication lists the disaster areas for each hurricane and explains which areas are eligible for administrative relief from the IRS and which areas receive special tax breaks under recently enacted provisions of the tax law. It provides information for individuals on claiming unreimbursed losses, the tax favored use of retirement savings, and new rules regarding charitable giving. The publication also highlights the changes businesses need to know about, such as a special depreciation allowance for qualified Gulf Opportunity Zone property, an increase in the amount affected businesses can expense instead of depreciating and new net operating loss (NOL) rules for losses in the GO Zone.
For more information, go to Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma (PDF 106.5K).
Where can I get information related to Gulf Opportunity Zone Act of 2005 and the Katrina Emergency Tax Relief Act of 2005?
The Gulf Opportunity Zone Act of 2005, in general, expands the provisions of the Katrina Emergency Tax Relief Act of 2005 to those affected by Hurricanes Rita and Wilma as well as Katrina. These two new laws provide certain tax breaks to help victims of the storms. The new laws alter the tax code to help individuals who suffered losses as a result of the hurricanes and to make it easier for individuals and companies to engage in charity to benefit those affected by the hurricanes.
More information is available at Fact Sheet 2006-12, Tax Law Changes Related to Hurricanes Katrina, Rita and Wilma, and the KETRA page.
Can I contact the IRS for tax-related disaster assistance?
Victims of Hurricane Katrina can call the IRS toll-free disaster hotline at 1-866-562-5227 for assistance.
Are tax relief assistance payments taxable?
Usually, no.
People in a Presidentially-declared disaster area who receive grants from state programs, charitable organizations or employers to cover medical, transportation or temporary housing expenses do not include these grants in their income.
What if I have difficulty getting a copy of my W-2?
Some taxpayers affected by the hurricanes may have difficulty obtaining 2005 Form W-2, Wage and Tax Statement, and other 2005 information documents. For more information, see Fact Sheet 2006-8, Substitute Forms W-2 for Hurricane Victims.
How do I reconstruct records that I lost?
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a casualty. More information is available in Fact Sheet 2006-7, Reconstructing Your Records.
My home was damaged by the hurricane, and I don’t have insurance. Do I qualify for any special tax relief?
Yes. You may be able to deduct your loss on your federal income tax return without the limits that ordinarily apply to such losses. Ordinarily, to figure a deduction for a casualty or theft loss of personal-use property, taxpayers must reduce the loss by $100 and also reduce the total of their casualty and theft losses by 10 percent of their adjusted gross income. Only the excess over these $100 and 10 percent limits is deductible. Recent changes to the tax law remove these limits for Hurricane Katrina, Rita and Wilma losses of personal-use property so that the entire amount is deductible. Only losses not covered by insurance or other reimbursements are eligible. See Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma.
Tax Topic 515 has more information about losses and theft.
Losses on business or rental property also qualify for tax relief. Different rules apply to figuring this deduction.
I heard that I can choose when to claim losses to property located in a disaster area. Is that true?
Yes. There is a special rule that applies to deductible losses on property located in a Presidentially-declared disaster area. Under this rule, you can choose to claim your losses on your 2004 return or claim them on your 2005 return. Taxpayers with hurricane-related losses have until October 16, 2006, to make this choice. See Notice 2006-17 for more information.
I want to claim my disaster losses on my 2004 return. Since I already filed my 2004 return, how do I do that?
You do not have to fill out your entire 2004 return all over again. Instead, file an amended return using Form 1040X. You use this form to claim your losses and show the items that need to be changed on your original return. Tax Topic 308 explains how to file an amended return.
What other kind of relief is available?
The IRS will waive the usual fees and expedite requests for copies of previously-filed tax returns for people who need them to apply for benefits or to file amended returns claiming disaster-related losses. Write the words “Hurricane Katrina” in red at the top of Form 4506, “Request for Copy of Tax Return,” or Form 4506-T, “Request for Transcript of Tax Return.”
People who are contacted by the IRS on a collection or examination matter should explain how the disaster affects them so that the IRS can provide appropriate consideration to their case.
Where can I get more information about the losses I've suffered?
Publication 2194, Disaster Losses Kit for Individuals ( PDF 860KB, 100 pages). Attention: Publication 2194 is being updated with new provisions of the Katrina Emergency Tax Relief Act of 2005. For information on these provisions, see News Release 2005-119, New Law Eases Loss Limitations for Katrina Victims
Publication 2194B, Disaster Losses Kit for Businesses ( PDF 943KB, 78 pages) — Contain various IRS publications and forms related to claiming disaster losses.
What if I've changed addresses or have an undelivered refund?
You should contact the IRS if you're a hurricane victim awaiting a tax refund that hasn't been received or to report a change of address.
A taxpayer expecting a refund check at an address where he or she no longer resides or who has not received an expected check because of mail delivery problems should contact the IRS disaster hotline at 1-866-562-5227 or the refund hotline at 1-800-829-1954.
In order to authenticate taxpayer identity, the IRS will ask callers to provide information from their last federal tax return, including name, address, taxpayer identification number and filing status. Taxpayers will also need to provide a current address where they can receive mail and a current telephone number.
How can I protect myself from falling victim to possible hurricane-related scams?
IRS cautions hurricane victims and people wishing to make donations to disaster-relief charities to avoid unscrupulous scam artists. While the IRS does not endorse any specific charity, you can use the IRS.gov search feature to find qualified charities for tax deduction purposes. Some organizations, such as churches and governments, may be qualified even though they are not listed. Since scam artists may falsely use legitimate charity names and or cloned Web sites, always be extremely cautious in giving out personal and financial information, such as Social Security or bank account numbers. Scam artists can use this information to steal your identity or gain access to your financial assets
The IRS has also established a toll-free, disaster assistance phone number, 1-866-562-5227, specifically for hurricane victims. If you are solicited by anyone, even someone claiming to be from the IRS, with promises of tax relief, tax refunds or disaster assistance, call the IRS’s disaster assistance number to verify the legitimacy of the solicitation before giving any personal or financial information to the solicitor. The IRS does not ask for personal identifying or financial information via e-mail or in unsolicited mail or telephone calls.
Related Items:
Help for Hurricane Victims
Fact Sheet 2006-06, IRS Offers Filing Season Assistance to Hurricane Victims
More FAQs for Hurricane Victims
There are two key dates –– Aug. 28, 2006, and Oct. 16, 2006.
To which returns does the Oct. 16 deadline apply?
Specifically, the IRS granted affected taxpayers in the counties listed below until Oct. 16, 2006, to file the following individual income tax returns:
2004 individual income tax returns, originally due on April 15, 2005, for which taxpayers obtained an extension of time to file until Oct. 15, 2005, and for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006. Payments accompanying 2004 individual returns were due on Oct. 15, 2005. Relief from interest and failure to pay penalties is limited to one year, from Aug. 29, 2005, through Aug. 28, 2006. Thus, if payments are not made by Aug. 28, 2006, interest and failure to pay penalties may apply.
2005 individual income tax returns, originally due on April 15, 2006, for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006. Interest and penalties will not apply to 2005 returns during this extension period.
Only the two individual income tax returns outlined above fall under the Oct. 16, 2006, deadline. (Affected taxpayers who need to file other types of returns, make other types of payments, or perform other time-sensitive acts should see information on the August deadline in the next FAQ.)
To claim this relief, affected taxpayers in the following counties and parishes should identify themselves by writing “Hurricane Katrina” in red at the top of their returns when filing or by calling the IRS Disaster hotline at 1-866-562-5227.
Affected taxpayers in the following counties may qualify for this relief:
Alabama counties: Baldwin, Choctaw, Clarke, Greene, Hale, Marengo, Mobile, Pickens, Sumter, Tuscaloosa and Washington.
Louisiana parishes: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Martin, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana.
Mississippi counties: Adams, Amite, Attala, Claiborne, Choctaw, Clarke, Copiah, Covington, Franklin, Forrest, George, Greene, Hancock, Harrison, Hinds, Holmes, Humphreys, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Marion, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Wilkinson, Winston and Yazoo.
What about the Aug. 28 deadline?
With the exception of the two individual income tax returns identified above, individual and business taxpayers in the parishes and counties of Louisiana, Mississippi, and Alabama have through Aug. 28, 2006, to file returns, make certain tax payments, and perform other time-sensitive acts that had a due date or extended due date on or after Aug. 29, 2005, and on or before Aug. 28, 2006. In addition, the failure to deposit penalty will be waived for taxpayers in these areas who are unable to make their deposits during this time period.
The postponement applies automatically to taxpayers in the following Louisiana parishes: Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles and St. Tammany.
The postponement also applies automatically to taxpayers in the following Mississippi counties: Hancock, Harrison and Jackson.
Affected taxpayers in the Alabama counties, and the other counties and parishes in Louisiana and Mississippi listed above also qualify for the postponement. However, those taxpayers must identify themselves as impacted. They can do this by writing “Hurricane Katrina” in red ink at the top of the return when filing, or by calling the IRS Disaster hotline at 1-866-562-5227.
Do I have more time to make my quarterly estimated tax payments?
Yes. Affected taxpayers in the areas listed above have until Aug. 28, 2006, to make these payments.
Do businesses have more time to make payroll tax deposits?
Yes. Affected businesses in the areas listed above have until Aug. 28, 2006, to make federal tax deposit (FTD) payments without incurring a late deposit penalty. This relief applies to any deposit originally due on or after Aug. 29, 2005.
This relief applies to employers who deposit social security, Medicare and federal income taxes withheld from employee paychecks. Businesses who deposit federal excise taxes are also eligible for this relief.
This relief is intended for taxpayers who are unable to meet their deposit obligations because their (or their service provider's) records, computers, or other essential supporting services were damaged, or essential personnel were injured, by the hurricane or any subsequent flooding. Thus, although the waiver applies to all affected taxpayers, taxpayers that are reasonably able to make their deposits are encouraged to do so.
Where can I learn more about what other "time-sensitive" actions receive relief?
The IRS is giving victims of Hurricane Katrina until Aug. 28, 2006 to perform other time-sensitive actions described in Treasury Regulation § 301.7508A-1(c)(1) (PDF 160KB, 10 pages) Revenue Procedure 2005-27 (PDF 492KB, 38 pages).
Where can I find general information about tax-related assistance for hurricane victims?
The IRS has issued a new publication to assist individual and business victims of Hurricanes Katrina, Rita and Wilma. It explains the tax law changes and relief provisions available to those affected by the hurricanes. The publication lists the disaster areas for each hurricane and explains which areas are eligible for administrative relief from the IRS and which areas receive special tax breaks under recently enacted provisions of the tax law. It provides information for individuals on claiming unreimbursed losses, the tax favored use of retirement savings, and new rules regarding charitable giving. The publication also highlights the changes businesses need to know about, such as a special depreciation allowance for qualified Gulf Opportunity Zone property, an increase in the amount affected businesses can expense instead of depreciating and new net operating loss (NOL) rules for losses in the GO Zone.
For more information, go to Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma (PDF 106.5K).
Where can I get information related to Gulf Opportunity Zone Act of 2005 and the Katrina Emergency Tax Relief Act of 2005?
The Gulf Opportunity Zone Act of 2005, in general, expands the provisions of the Katrina Emergency Tax Relief Act of 2005 to those affected by Hurricanes Rita and Wilma as well as Katrina. These two new laws provide certain tax breaks to help victims of the storms. The new laws alter the tax code to help individuals who suffered losses as a result of the hurricanes and to make it easier for individuals and companies to engage in charity to benefit those affected by the hurricanes.
More information is available at Fact Sheet 2006-12, Tax Law Changes Related to Hurricanes Katrina, Rita and Wilma, and the KETRA page.
Can I contact the IRS for tax-related disaster assistance?
Victims of Hurricane Katrina can call the IRS toll-free disaster hotline at 1-866-562-5227 for assistance.
Are tax relief assistance payments taxable?
Usually, no.
People in a Presidentially-declared disaster area who receive grants from state programs, charitable organizations or employers to cover medical, transportation or temporary housing expenses do not include these grants in their income.
What if I have difficulty getting a copy of my W-2?
Some taxpayers affected by the hurricanes may have difficulty obtaining 2005 Form W-2, Wage and Tax Statement, and other 2005 information documents. For more information, see Fact Sheet 2006-8, Substitute Forms W-2 for Hurricane Victims.
How do I reconstruct records that I lost?
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a casualty. More information is available in Fact Sheet 2006-7, Reconstructing Your Records.
My home was damaged by the hurricane, and I don’t have insurance. Do I qualify for any special tax relief?
Yes. You may be able to deduct your loss on your federal income tax return without the limits that ordinarily apply to such losses. Ordinarily, to figure a deduction for a casualty or theft loss of personal-use property, taxpayers must reduce the loss by $100 and also reduce the total of their casualty and theft losses by 10 percent of their adjusted gross income. Only the excess over these $100 and 10 percent limits is deductible. Recent changes to the tax law remove these limits for Hurricane Katrina, Rita and Wilma losses of personal-use property so that the entire amount is deductible. Only losses not covered by insurance or other reimbursements are eligible. See Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma.
Tax Topic 515 has more information about losses and theft.
Losses on business or rental property also qualify for tax relief. Different rules apply to figuring this deduction.
I heard that I can choose when to claim losses to property located in a disaster area. Is that true?
Yes. There is a special rule that applies to deductible losses on property located in a Presidentially-declared disaster area. Under this rule, you can choose to claim your losses on your 2004 return or claim them on your 2005 return. Taxpayers with hurricane-related losses have until October 16, 2006, to make this choice. See Notice 2006-17 for more information.
I want to claim my disaster losses on my 2004 return. Since I already filed my 2004 return, how do I do that?
You do not have to fill out your entire 2004 return all over again. Instead, file an amended return using Form 1040X. You use this form to claim your losses and show the items that need to be changed on your original return. Tax Topic 308 explains how to file an amended return.
What other kind of relief is available?
The IRS will waive the usual fees and expedite requests for copies of previously-filed tax returns for people who need them to apply for benefits or to file amended returns claiming disaster-related losses. Write the words “Hurricane Katrina” in red at the top of Form 4506, “Request for Copy of Tax Return,” or Form 4506-T, “Request for Transcript of Tax Return.”
People who are contacted by the IRS on a collection or examination matter should explain how the disaster affects them so that the IRS can provide appropriate consideration to their case.
Where can I get more information about the losses I've suffered?
Publication 2194, Disaster Losses Kit for Individuals ( PDF 860KB, 100 pages). Attention: Publication 2194 is being updated with new provisions of the Katrina Emergency Tax Relief Act of 2005. For information on these provisions, see News Release 2005-119, New Law Eases Loss Limitations for Katrina Victims
Publication 2194B, Disaster Losses Kit for Businesses ( PDF 943KB, 78 pages) — Contain various IRS publications and forms related to claiming disaster losses.
What if I've changed addresses or have an undelivered refund?
You should contact the IRS if you're a hurricane victim awaiting a tax refund that hasn't been received or to report a change of address.
A taxpayer expecting a refund check at an address where he or she no longer resides or who has not received an expected check because of mail delivery problems should contact the IRS disaster hotline at 1-866-562-5227 or the refund hotline at 1-800-829-1954.
In order to authenticate taxpayer identity, the IRS will ask callers to provide information from their last federal tax return, including name, address, taxpayer identification number and filing status. Taxpayers will also need to provide a current address where they can receive mail and a current telephone number.
How can I protect myself from falling victim to possible hurricane-related scams?
IRS cautions hurricane victims and people wishing to make donations to disaster-relief charities to avoid unscrupulous scam artists. While the IRS does not endorse any specific charity, you can use the IRS.gov search feature to find qualified charities for tax deduction purposes. Some organizations, such as churches and governments, may be qualified even though they are not listed. Since scam artists may falsely use legitimate charity names and or cloned Web sites, always be extremely cautious in giving out personal and financial information, such as Social Security or bank account numbers. Scam artists can use this information to steal your identity or gain access to your financial assets
The IRS has also established a toll-free, disaster assistance phone number, 1-866-562-5227, specifically for hurricane victims. If you are solicited by anyone, even someone claiming to be from the IRS, with promises of tax relief, tax refunds or disaster assistance, call the IRS’s disaster assistance number to verify the legitimacy of the solicitation before giving any personal or financial information to the solicitor. The IRS does not ask for personal identifying or financial information via e-mail or in unsolicited mail or telephone calls.
Related Items:
Help for Hurricane Victims
Fact Sheet 2006-06, IRS Offers Filing Season Assistance to Hurricane Victims
More FAQs for Hurricane Victims
posted by Leslie | Thursday, September 14, 2006
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