Frequently Asked Questions
Restore Louisiana Grants
Where can I obtain information about federal tax relief for disasters
Information about federal tax relief for disasters is posted on the IRS web site under Tax Relief in Disaster Situations. Specific information about the March 2016 floods can be found at Tax Relief for Victims of Severe Storms and Flooding in Louisiana March 2016 and the August 2016 flood at Tax Relief for Victims of Severe Storms, Flooding in Louisiana August 2016.
What is the Restore Louisiana Homeowner Assistance program (“Restore Louisiana”)?
In 2016, after Gov. John Bel Edwards sought federal flood recovery funding for Louisiana, Congress provided three appropriations of Community Development Block Grant-Disaster Recovery funds for nationwide recovery from several disasters. The U.S. Department of Housing and Urban Development to various states allocated these funds. HUD allocated $437.8 million from the first appropriation, $1.2 billion from the second appropriation and $51 million from the third appropriation to Louisiana. The Disaster Recovery Unit within the Division of Administration's Office of Community Development administers the Restore Louisiana to help Louisiana residents recover from the Great Floods of 2016.
What is the “duplication of benefits” issue?
Prior to the enactment of the Disaster Recovery Reform Act of 2018, victims of the Great Floods of 2016, that were approved for Small Business Administration loans were not able to make full use of grant funding available through the Restore Louisiana. The reason for this problem was that the full-approved amount of the loan was considered to be the same as a grant and therefore was treated as a duplication of benefits.
Section 1210 of the Disaster Recovery Reform Act of 2018 prohibits a determination that a federal disaster relief loan is a duplication of assistance, if all federal assistance is used toward a loss suffered because of the major disaster or emergency. Therefore, a Small Business Administration loan will not count toward an applicant’s eligibility for Restore Louisiana recovery grants.
How does the Restore Louisiana affect my Louisiana state income tax?
Pursuant to IRC Section 139, qualified disaster relief payments are excluded from gross income. The definition of qualified disaster relief payments includes amounts paid by a federal, state, or local government in connection with a qualified disaster. The definition of qualified disaster includes a federally declared disaster. The Great Floods of 2016 were declared to be a federally declared disaster on August 14, 2016 and therefore qualify under the definition of federally declared disaster. Therefore, Restore Louisiana recovery grants are excluded from gross income.
However, qualified disaster relief payments for losses previously reimbursed by insurance or previously deducted in a prior tax year will be included in gross income.
For individual income tax purposes, Louisiana conforms to the federal adjusted gross income calculation. Pursuant to LA. R.S. 47:293(1), Louisiana adjusted gross income means the federal adjusted gross income that is reportable on the individual’s federal income tax return. Therefore, if the qualified disaster relief payments are excluded from federal gross income, these funds will not be subject to Louisiana individual income tax.
Does Louisiana have any special tax treatment for the Great Flood of 2016?
Yes. Act 1 of the 2018 First Extraordinary Session of the Louisiana Legislature provided state specific relief to accompany the federal relief provided by Public Law 115-97, more commonly referred to as the Tax Cuts and Jobs Act (“TCJA”). See Revenue Information Bulletin No. 18-012 for more information.
In addition, LA. R.S. 47:293(9)(a)(i) provides for a deduction for residents to arrive at tax table income for “any gratuitous grant, loan, or other benefit directly or indirectly provided to a taxpayer by a hurricane recovery entity if such benefit was included in federal adjusted gross income.” La. R.S. 47:293(10) provides a similar income tax deduction for nonresident individuals. A hurricane recovery entity is defined by La. R.S. 47:293(5) as “…the Road Home Corporation as provided for in Chapter 3-E of Title 40 of the Louisiana Revised Statutes of 1950, the Louisiana Recovery Authority as provided for in Part V of Chapter 2 of Title 49 of the Louisiana Revised Statutes of 1950, the disaster recovery unit within the office of community development, division of administration, or the Louisiana Family Recovery Corps.”
Since the Office of Community Development, Disaster Recovery Unit, administers the Restore Louisiana Program, Restore Louisiana payments would qualify as a “hurricane recovery entity” under R.S. 47:293(5). Therefore, if the qualified disaster relief payments for losses was previously reimbursed by insurance or previously deducted in a prior tax year, the payment will be included in gross income but would be deducted from individual income tax. Refer to Revenue Ruling 08-001 for whether insurance settlement proceeds have similar treatment.
In addition to the Restore Louisiana grants, do benefits received from other flood or hurricane recovery entities qualify for this special tax treatment?
Yes. Grants, loans, or other benefits received from other flood or hurricane recovery entities such as the Louisiana Recovery Authority, Road Home, or the Louisiana Family Recovery Corps are eligible for the same state tax treatment as grants received from the Restore Louisiana Program.
I deducted a casualty loss on either my 2015 or 2016 federal and state return. I received a restore Louisiana recovery grant for that loss in 2019. What do I do?
On your 2019 federal income tax return, the Restore Louisiana recovery grant is taxable because you had previously deducted the disaster casualty loss. Since Louisiana conforms to the federal adjusted gross income calculation, the Restore Louisiana recovery grant is included in Louisiana adjusted gross income. However, the Restore Louisiana recovery grant would be deemed to be hurricane recovery benefits, and it would be allowed as a deduction on the Louisiana return.
How do I claim the deduction for the recovery benefits?
You can claim the deduction for Hurricane Recovery Benefits on the individual income tax return (Schedule E, code 11E, on Form IT-540, Louisiana Resident Income Tax Return, or Line 26 of the Nonresident and Part-Year Resident Worksheet on Form IT-540B, 2018 Louisiana Nonresident and Part-Year Resident Income Tax Return).
How can I get a copy of my tax return?
As of July 17, 2015, the research fee for copies of tax returns authorized by R.S. 47:1507 are as follows:
- $15.00 for a copy of any tax return or other document for each year or tax period requested, regardless of whether the requested return or document is located.
$25.00 for each certified copy of any return or other document for each year or tax period requested, regardless of whether the requested return or document is located.
All research fees for copies must be paid when you submit the Tax Information Disclosure Authorization, Form R-7004. Payments can be by check or money order made payable to the Louisiana Department of Revenue. Cash cannot be accepted. Credit card payments can be submitted in Louisiana File Online.
top of page