You may be able to claim a “casualty loss” deduction on your federal income tax return using Form 1040 Schedule A, Line 20. A casualty loss is damage to or loss of your home, household items or personal vehicle. A casualty loss is not normal wear and tear. A casualty loss does not include losses covered by insurance or other reimbursement.

If you paid taxes in the tax year immediately preceding the tax year in which the federally declared disaster occurred, you can elect to deduct your loss on a Form 1040 for the prior year instead of waiting to file your current year return. This will allow you to receive a refund of some or all of the taxes paid on your prior year return. You can request copies of IRS account transcripts, or previously filed federal tax returns free of charge, when you submit Form 4506, Request for Copy of Tax Return, or Form 4506‐T, Request for Transcript of Tax Return. Just write the name of the disaster in red at the top of the form before submitting (for example, West Virginia Flooding or West Virginia Storm).

If you are not fully reimbursed for your loss, you may be able to claim a casualty loss deduction for a loss covered by insurance if you timely file a claim for reimbursement and you reduce the loss by the amount of any reimbursement or expected reimbursement.

Food, medical supplies and other forms of disaster assistance do not reduce your casualty loss unless they are replacements for lost or destroyed property.

Loan proceeds used to rehabilitate or replace property do not reduce your casualty loss.

Generally, disaster relief grants, like FEMA assistance received under the Robert T. Stafford Disaster and Emergency Assistance Act, are not included in your income.

You do not reduce your casualty loss by insurance payments you received to cover living expenses if you lose the use of your main home because of the casualty event or government authorities do not allow you to access your main home because of a casualty event or the threat of one. However, if these insurance payments are more than the temporary increase in your living expenses you must include the excess in your income.

Disaster unemployment assistance payments are taxable income.

Casualty loss deductions are complicated. If taxpayer needs assistance making a casualty loss claim on their federal tax return they should consult a tax professional. Neither VITA nor AARP Tax-Aide (free tax preparation in person sites) can assist in preparing tax returns claiming casualty loss. Casualty loss is outside of the scope of the VITA and AARP grant. However, a taxpayer could self-prepare using myfreetaxes.com. If you need additional forms or publications, there are several ways you can obtain them. You can download forms from www.irs.gov. You can also order forms or publications at no cost by calling 1‐800‐829‐3676. If you need additional tax assistance, please call 1‐800‐829‐1040.

Individuals can call the IRS Hotline. Assistors are available Monday through Friday to provide explanations on filing and payment relief that may have been provided by IRS due to a disaster. You may call the IRS Disaster Assistance Hotline at 1‐866‐562‐5227, between 7:00 am and 7:00 pm, local time. IRS personnel may be able to provide face‐to‐face assistance on disaster related issues at your local IRS office. Click here to find a Taxpayer Assistance Center in your area.

Go here for the IRS Disaster Resource Guide for Individuals and Businesses.