Midwestern Disaster Area Tax Impacts
If you live in the Midwestern Disaster areas and were affected by the storms of 2008, there are various tax law changes for you to consider when filing your taxes this year.
The Midwestern Disaster areas include Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska, and Wisconsin. Specific counties are listed in Publication 4492-B.
Tax Changes
Here are highlights of some of the additional tax credits and tax changes you can take advantage of:
- Hope Credit: The maximum is increased from $1,800 to $3,600 per student.
- Lifetime Learning Credit: The maximum is increased from $2,000 to $4,000 per return.
- Casualty Losses: Casualty losses from the disasters are not subject to the $100 or 10% of AGI limits.
- Debts Not Taxable: If a mortgage is canceled due to the disaster, the forgiven debt will not be taxable.
- Housing of Displaced People: If you provide housing for a person displaced by the disasters, you can claim an additional exemption of $500 per person.
There are other tax law changes that apply to the disaster areas including changes to the earned income tax credit, use of retirement funds, and charitable miles. See Publication 4492-B for complete details.
