ESSEX JUNCTION, Vt. – With the April 17 deadline for filing individual income tax returns rapidly approaching, Vermonters who were affected by last year’s spring floods or Tropical Storm Irene may have help available.
Officials with the Federal Emergency Management Agency urged Vermonters to check with both the Internal Revenue Service and the Vermont Tax Department to learn what benefits may be available.
“Vermonters who suffered losses from a presidentially declared disaster have a variety of options open to them,” said FEMA’s Federal Coordinating Officer James N. Russo. “In addition to filing a disaster casualty loss claim, they can receive a waiver of fees and expedited processing if they request documents like prior tax returns that may have been destroyed.”
Casualty losses – property damaged or destroyed and not covered by insurance or other reimbursement – can be deducted from an amended 2010 return or on the 2011 return, both of which are due April 17. Russo reminded those who received Individual Assistance grants from FEMA that these are not considered income for tax purposes.
The deduction applies to loss of property because of sudden, unexpected or unusual events such as severe weather. The unreimbursed loss must be more than 10 per cent of the taxpayer’s adjusted gross income to be eligible for the deduction, and individuals cannot deduct those personal property losses that have been covered by insurance or other reimbursements, such as FEMA Individual Assistance grants.
The IRS website has tax information about federal tax relief in disaster situations at: http://www.irs.gov/newsroom/article/0,,id=108362,00.html. To contact the IRS toll-free disaster hotline, call 1-866-562-5227, or visit www.irs.gov
Business owners may also be able to deduct qualified expenses and should consult Publication 2194B: Disaster Losses Kit for Businesses for more information.
Vermont state income taxes are based on the filer’s federal taxable income, so flood-related losses do not need to be documented separately with the State of Vermont.
“We encourage Vermonters affected by Tropical Storm Irene to take advantage of all the assistance available to them,” said Mary Peterson, Tax Commissioner for the State of Vermont. “Vermonters able to reduce their tax liability at the federal level due to Irene may be able to receive tax relief at the state level as well. It is important to understand all of your options.”
For information about Vermont income taxes, contact the Vermont Department of Taxes at 1-(866) 828-2865 (toll-free in VT) or (802) 828-2865 (local & out-of-state) or visit their website, www.state.vt.us/tax
The Vermont Society of Certified Public Accountants (CPAs) has been offering free or reduced-fee tax preparation and consultation services to Vermonters affected by Tropical Storm Irene. There are special forms and requirements for casualty losses, but at this late date VTCPA is urging Vermonters who have not yet sought help to file for extensions. Contact Carolyn Stevens, CPA at