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The Federal Housing and Economic Recovery Act of 2008 was designed primarily to address the subprime mortgage crisis. The Act, which was passed by the U.S. Congress on July 24, 2008, and was signed by the President on July 30, 2008, authorizes the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders write-down principal loan balances to 90 percent of current appraisal value.
In addition to the mortgage crisis provisions, the Act allows taxpayers to amend their 2005 and 2006 federal income tax returns to adjust home casualty losses and related net operating loss carry forwards for Hurricane Katrina and Rita recovery awards such as Road Home grants that were received in later years. Since federal income tax return amendments to prior year returns could reduce the taxpayer’s federal income tax deduction and therefore result in additional state income tax liabilities, guidelines are needed to ensure the state tax exemption of the hurricane recovery grants.
Information about federal deductions for disaster related losses is posted on the IRS web site under FAQs for Hurricane Victims-Amended Returns.
Yes. Grants, loans, or other benefits received from other hurricane recovery entities such as the Louisiana Recovery Authority or the Louisiana Family Recovery Corps are eligible for the same federal and state tax treatment as grants received from the Road Home Program.
No—you are not required to file an amended return with the state of Louisiana even if you file an amended federal return provided the amended return is filed with the IRS for the sole purpose of taking advantage of the Federal Housing and Economic Recovery Act of 2008.
The Louisiana Legislature has specifically disallowed taxation of any hurricane recovery grants received by taxpayers who were adversely affected by Hurricanes Katrina and Rita. Requiring amended state returns in this instance would have the effect of imposing a tax on the hurricane recovery grants. Therefore, for tax years ending before 2008, if the only change to a taxpayer’s federal return is a casualty or net operating loss adjustment allowed by the Federal Housing and Economic Recovery Act of 2008, the taxpayer will not be required to file a Louisiana amended return.
Yes—if you determine that your state income tax would be reduced if you amend both your state and federal income tax returns in accordance with the provisions of the Federal Housing and Economic Recovery Act of 2008, you may amend your state tax return. However, if you choose to file one amended return with the state of Louisiana, you must file amended returns for all periods for which you filed an amended return with the IRS. You can not amend only selected periods where it is to your tax advantage to do so.
For amended returns that are required to correct other items of income and expense, the starting point to determine the correct Louisiana individual income tax will be the federal and state income tax returns that were computed and filed under federal and state law as they existed before the enactment of the Federal Housing and Economic Recovery Act of 2008.
No—you are not required to amend either state tax return. However, if you choose to amend one of the state income tax returns, you must file amended returns for all periods that federal amended returns were filed. You are not allowed to amend only selected periods.
Normally, if a taxpayer amends their federal income tax return, they are required to amend the Louisiana income tax return. However, in this case filing amended Louisiana tax returns to report the reduced federal casualty loss or net operating loss would result in an increased Louisiana income tax for those years in which the losses were reduced. Since The Louisiana Legislature has specifically disallowed taxation of any recovery grants received by taxpayers who were adversely affected by Hurricanes Katrina and Rita, requiring amended state returns in this instance would have the effect of imposing a tax on hurricane recovery grants. Therefore, for tax years ending before 2008, if the only change to a taxpayer’s federal return is a casualty or net operating loss adjustment allowed by the Federal Housing and Economic Recovery Act of 2008, the taxpayer will not be required to file a Louisiana amended return.
If your federal amended tax return has other changes in addition to the hurricane casualty losses and hurricane recovery grants, you will be required to amend your Louisiana income tax return for that year. In preparing your amended state income tax return, use the last federal income tax return filed before the adjustments for the Hurricane casualty losses and hurricane recovery grants as the starting point for determining what amendments are needed for the state income tax return and make only those amendments that are not related to the Hurricane Katrina or Rita casualty losses or hurricane recovery grants.
You may contact the department at 225-219-0102 to request a copy of any returns on file. You may also make your request by email through our Contact Us webpage.Fill out the required fields and submit your request. Be sure to include which tax years you need. Finally, you can submit your request in writing. Please provide your complete name, address, social security number, a contact phone number, and the tax years you need. Written request should be mailed to PO Box 201, Baton Rouge, LA 70821.
If you wish to authorize your tax preparer or someone else to receive copies of your tax returns, you must complete a Tax Information Disclosure Authorization, Form R-7004.This form authorizes the one-time release of information to the appointee you list on the form. Instructions for the form can be found here.
Yes, they can be found here.
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