By Louisiana Personal Injury Attorney J. Price McNamara with the Law Offices of Price McNamara.
Provisions included in the Tax Cut and Jobs Act signed into law in late 2016 will provide individuals financially impacted by the rain and flooding that occurred across the state of Louisiana in August 2016.
The changes, which were championed by U.S. Sen. Bill Cassidy, will allow individuals who suffered losses related to their homes, vehicles and other personal property which were not otherwise reimbursed by insurance coverage or Federal grants, to deduct those losses by amending their 2016 tax return.
Previously, deductions for losses like this were allowed, but they were capped at 10 percent of a filer’s income.
“Provisions like this will provide thousands of Louisianans with financial benefits related to losses that the either were not covered for from an insurance standpoint, or that the insurance company declined to pay out,” said J. Price McNamara, a Louisiana Flood Damage Claim attorney with the Law Offices of Price McNamara in Baton Rouge. “I have represented clients in matters related to this flood and even know individuals with insurance coverage that still had losses they were unable to recover. This change will allow them a chance to be made completely whole.”
Individuals will need to take care that they do not “double-dip”, and accidentally or incorrectly list a loss on their amended tax return for which they were actually reimbursed.
“Doing this could not only open you up to issues with the IRS, but it could open you up to issues with the insurance company,” said McNamara. “The insurance company may try and claw back any funds they paid out to you by saying that you were reimbursed by another entity for the same damage. They may not be successful, but that does not mean they may not try.”
Additionally, the losses claimed on any amended tax return would need to be losses due to the August 2016 flood and nothing else. Any other losses, due to flooding or otherwise at anytime other than the August 2016 flood, cannot be claimed over and above the normal 10 percent amount allowed by law.
