Tax Help for Louisianans after Hurricanes Katrina and Rita
Release Date: March 17, 2006
Release Number: 1603-405
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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. In April 2005, the U.S. Congress passed the Jindal-Foley Bill, exempting federal disaster mitigation grants from taxation by the Internal Revenue Service (IRS). This legislation was signed into law by the President on April 15, 2005.
Filing Deadlines and Payment Extended:
The IRS 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
Publication 547 Casualties, Disasters and Thefts
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.
FEMA manages federal response and recovery efforts following any national incident. FEMA also initiates mitigation activities, works with state and local emergency managers, and manages the National Flood Insurance Program. FEMA became part of the U.S. Department of Homeland Security on March 1, 2003.
Last Modified: Friday, 17-Mar-2006 16:47:20