[StBernard] Update From State Representative Nita Rusich Hutter

[Westley Annis]

Update From State Representative Nita Rusich Hutter

March 17 , 2006


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This information is forwarded to you by request of the U.S. Department of
Homeland Security's Federal Emergency Management Agency (FEMA).

 

TAX HELP FOR LOUISIANANS AFTER HURRICANES KATRINA AND RITA

Baton Rouge, La. -The U.S. Department of Homeland Security's Federal
Emergency Management Agency (FEMA) and the State of Louisiana want residents
affected by Hurricanes Katrina and Rita to apply for disaster assistance
without fear of future penalties to any income-based benefits, such as
social security. Louisianans should also take advantage of specific rules
designed to make tax filing easier this year like the deadline extension,
deductions for demolition costs, and tax breaks for those who housed
evacuees. 


Disaster Relief is not Taxable Income: 

Disaster assistance cannot be taxed as income if it was spent for necessary
personal, medical, dental, family, living, or funeral expenses. In addition,
assistance to repair or replace a home or the contents of a home destroyed
by Hurricanes Katrina or Rita will not be taxed as income. 

Disaster relief payments from the government or donations from charitable
organizations will not affect eligibility for individual federal or state
benefits such as Social Security, Medicare, food stamps, welfare assistance.


Unemployment assistance payments will generally be taxed, as will federal
disaster mitigation payments designed to improve property and reduce risk
against further disasters. Any property sold or given to the federal
government as part of a disaster mitigation program is also taxable.


Filing Deadlines and Payment Extended:

The Internal Revenue Service will automatically postpone taxpayer filing and
payment deadlines until August 28, 2006 in Cameron, Jefferson, Orleans,
Plaquemines, St. Bernard, St. Charles, and St. Tammany Parishes. 

To ensure that those who suffered severe hurricane damage in Louisiana
outside the above parishes get necessary relief from filing and payment
deadlines, taxpayers must identify themselves as impacted. Taxpayers in the
following parishes who need the available hurricane-specific deductions and
extensions should write "Hurricane Katrina" in red ink at the top of their
return when filing: Acadia, Ascension, Assumption, Calcasieu, East Baton
Rouge, East Feliciana, Iberia, Iberville, Jefferson Davis, Lafayette,
Lafourche, Livingston, Pointe Coupee, St. Helena, St. James, St. John the
Baptist, St. Mary, St. Martin, Tangipahoa, Terrebonne, Vermilion,
Washington, West Baton Rouge, and West Feliciana Parishes.


Tax Deductions for Demolition Costs through 2007: 

Louisiana taxpayers in the following parishes with property damage from
either Hurricanes Katrina or Rita may deduct up to 50 percent of all debris
removal or structural demolition costs incurred on their property from
August 27, 2005, to January 1, 2008: Acadia, Allen, Ascension, Assumption,
Beauregard, Calcasieu, Cameron, East Baton Rouge, East Feliciana,
Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette,
Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Sabine, St.
Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St.
Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne,
Vermilion, Vernon, Washington, West Baton Rouge, and West Feliciana.


Tax Breaks for Those Who Housed Hurricane Katrina Evacuees:

Louisiana taxpayers who sheltered Hurricanes Katrina evacuees in their
primary residence may be able to claim an additional tax exemption of $500
for each individual that stayed in their home for at least 60 days in a row.
The maximum amount an individual host can claim is $2,000 on either the 2005
or 2006 federal tax return, but not both years. 

The tax exemption is still allowed if the host already received funds for
money spent on the evacuees that were unusual to the home like extra food,
clothes, gas for the host's car, or long distance calls. The host does not
qualify for the exemption if they already received money from any source for
normal housing costs like rent or heat, electricity, or water used by the
evacuees.


How to get Tax Help 
FEMA urges affected Louisianans to seek tax counseling this year. The IRS is
providing special help for those directly affected by Hurricane Katrina and
Rita, as well as survivors and personal representatives of the victims. A
toll-free number is available for people who have trouble filing or paying
their taxes because they were affected by either hurricane or who have other
tax issues related to the hurricanes.

Call 1-866-562-5227 
Monday through Friday 
In English-7 a.m. to 10 p.m. local time 
In Spanish-8 a.m. to 9:30 p.m. local time 

For more information on the topics above, visit www.irs.gov or see the IRS
Publications below:
Publication 4492 - Information for Taxpayers Affected by Hurricanes Katrina,
Rita or Wilma

http://www.irs.gov/publications/p4492/index.html

Publication 547 - Casualties, Disasters and Thefts
http://www.irs.gov/publications/p547/index.html

Taxpayers with incomes under $38,000: 

Call 1-800-829-1040 to contact the IRS for referrals for free tax
preparation at Volunteer Income Tax Assistance (VITA) or Tax Counseling for
the Elderly (TCE) locations.