People whose homes, businesses and income were affected by Katrina may be able to take advantage of several tax advantages for this tax season, an IRS official said on the Eyewitness Morning News Wednesday.

Eric Erickson of the Internal Revenue Service said that a loss of income may allow more low to moderate income families to claim the Earned Income tax credit. The credit is allowed for certain people making less than $38,000 per year and is graduated so that the less you make, the more refund you would get. It also provides more money for working families with children. The refund goes as high as $4,400 depending on your income and number of dependents.

Erickson also said that losses from Katrina could be fully deducted, minus the insurance money you’ve received. In the past the losses had to equal a certain percentage of your income before you could deduct any.

And there is a $500 tax credit available to people who housed evacuees for at least 60 days in their homes. Whether a family member or not, if you took in an evacuee, you can claim a tax credit of up to $500 per person as long as they spent at least two months with you.

Erickson said low income taxpayers could have their returns prepared for free and that other tax information, specifically on the Earned Income Tax Credit, would be available at a forum this weekend.


Free Tax Forum
Watson Memorial Teaching Ministries
4400 St. Charles Avenue
Saturday, 9 a.m.

1-800-TAX-FORM
1-800-829-3676