Did you know that if you experience property loss caused by a natural disaster, you may be eligible for a tax credit? While it will may not cover the entire extent of your losses, if you’re eligible, it will help you recoup some losses.
One of the primary factors that determines eligibility is the fact that the disaster must be declared a state of emergency by the governor (for a credit on a CA return) or by the president (for a federal return). In addition, losses must not be covered by insurance. For example, earthquakes or fires are not always covered by home insurance so those affected individuals may be eligible for a credit.
If you do plan on claiming the credit, it must be reflected on either the current year’s return or the previous year’s return. You will also need to fill out the Casualties and Thefts Form (Form 4684) available on the IRS website. Other forms may be required depending on your individual situation.
While no one wants to experience a natural disaster, assistance may be available. As always, Quantax can help determine if you are eligible and help you file the required forms.