London, KY -- Residents of Kentucky's disaster counties are eligible for federal income tax refunds if they suffered uninsured property losses due to the spring storms and flooding.
According to the Internal Revenue Service (IRS), this special refund is available to taxpayers who claim a "non-business casualty loss" deduction on their returns. The deduction applies to loss of property due to a sudden, unexpected or unusual identifiable event, such as violent weather.
When the loss occurs in a presidentially declared disaster area, as in Kentucky, taxpayers can choose to claim the deduction on federal tax returns for the current tax year (2002) or the previous year (2001), whichever is best for the taxpayer.
Claiming the deduction on taxes already paid for 2001 can be a source of cash for those in the disaster area in need of money. Only residents in counties declared as disaster areas have this option. Residents can learn if they reside in such a county by calling FEMA's disaster helpline, 1-800-621-FEMA (1-800-621-3362). IRS claims are filed on Form 4684. Obtaining a copy of IRS Publication 547 will help guide taxpayers through the process.
To be eligible, taxpayers must have sustained uninsured losses exceeding 10 per cent of adjusted gross income. The IRS will ask for the latest tax return, estimates of repairs, before and after photographs and appraisals or any other loss documentation.
In some cases the IRS will delay collection actions or audits for residents in disaster areas. Extensions in filing individual returns are automatic using form 4868 if filed by the April 15 income-reporting deadline.
For information, call the Internal Revenue Service at toll-free at 1-800-829-1040 or visit the IRS website at www.IRS.gov.