Since the federal government determined that the Dec. 1 2011 wind storm did not cause enough damage to be considered a disaster worthy of federal emergency recovery funds, the State of California passed legislation sponsored by Senator Hernandez that will provide tax relief to residents and business owners who suffered financial losses in the storm.
The forms must be completed by October 15th.
The legislation, called SB 1544, was chaptered into law on September 7, 2012. In order for individuals to amend their tax returns to get a refund from taxes they already paid, they will have to file an amended return before October 15th.
The links below provide information on how to claim a disaster loss for those victims of the 2011 windstorms. The first link describes the processes and forms individuals will need to complete in order to claim the loss, and the second link is a sample of the form that will actually need to be filled out. As with any tax issues, Those seeking to claim this loss are strongly encouraged to seek a professional tax advocate as the Senator’s office is not allowed to tell people, directly, how to fill out these forms.
https://www.ftb.ca.gov/forms/misc/1034.pdf
https://www.ftb.ca.gov/forms/2011/11_540x.pdf
SB 1544 – Fact Sheet
Version: 97 March 1, 2012
SB 1544 (Hernandez) Factsheet
Los Angeles County: Windstorm Tax Relief
Purpose
SB 1544 would apply excess disaster loss treatment to victims of the Los Angeles County windstorm. The bill would allow taxpayers to carry forward 100 percent of uninsured losses for 20 years, and claim losses on amended returns.
Summary
Under current federal and state law, taxpayers can only deduct losses in the year that a loss occurs or the year before by amending their returns, but only when the President declares the event a disaster. While the damage from the event was significant enough for the Governor to declare a State of Emergency for the area, the damages were just shy of the threshold necessary for the President to make such a declaration to automatically trigger this type of tax treatment. Without this declaration, individuals and companies are unable to receive this type of tax treatment.
Background
Beginning on November 30, 2011, a powerful wind storm blew through Los Angeles County and much of the San Gabriel Valley, toppling trees, downing power lines, slowing traffic, damaging homes and vehicles, and knocking out electricity for over 350,000 customers. Clean up in Los Angeles County alone topped over $17 million.
On December 9, 2011, due to the severity of the winds, the Governor declared these events a State of Emergency, qualifying Los Angeles County windstorm victims for future and immediate tax relief. This bill would simply give affected residents and businesses the same tax treatment that has been afforded to other Californians afflicted by other declared State of Emergencies.
Support
El Monte/South El Monte Chamber of Commerce
City of San Gabriel
County of San Bernardino
Opposition
None on file.
Contacts
Please contact Ronald Berdugo in Senator Hernandez’s Office at (916) 651-4024 or email at Ronald.Berdugo@sen.ca.gov
Senate Bill No. 1544
CHAPTER 284
An act to add Sections 17207.12 and 24347.12 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
[Approved by Governor September 7, 2012. Filed with Secretary of State September 7, 2012.]
legislative counsel’s digest
SB 1544, Hernandez. Income taxes: disaster losses: Counties of Los Angeles and San Bernardino.
The Personal Income Tax Law and the Corporation Tax Law allow individual and corporate taxpayers to utilize net operating losses and carryovers and carrybacks of those losses for purposes of offsetting their individual and corporate tax liabilities. Existing law, for net operating losses incurred in taxable years beginning on or after January 1, 2008, provides a
carryover period of 20 years and allows net operating losses attributable to taxable years beginning on or after January 1, 2013, to be carrybacks to each of the preceding 2 taxable years, as provided. Existing law disallows the deduction for net operating losses and net operating loss carryovers in the 2008 to 2011, inclusive, taxable years for a taxpayer with over a specified amount of business income and extends the carryover period for those net
operating losses, thus allowing the taxpayer to have the same number of years to utilize the deduction as the taxpayer would have had if the disallowance for those taxable years had not occurred.
Existing law disallows net operating loss carrybacks for any net operating losses attributable to taxable years beginning before January 1, 2013, but would allow net operating losses attributable to taxable years beginning on or after January 1, 2013, to be carrybacks to each of the preceding 2 taxable years, as provided.
This bill would conform to a specified section of the Internal Revenue Code regarding disaster losses, which would authorize a taxpayer to make an election to claim a deduction for any losses sustained in the Counties of Los Angeles and San Bernardino as a result of the severe winds that occurred in November 2011 on the tax return for the preceding year, as provided.
This bill would provide that any provision of law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss does not apply to a net operating loss attributable to those severe winds that occurred in November 2011 in the Counties of Los Angeles and San Bernardino.
This bill would make a legislative finding and declaration relating to the statewide public purpose served by the bill.
This bill would take effect immediately as a tax levy.
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The people of the State of California do enact as follows:
SECTION 1. Section 17207.12 is added to the Revenue and Taxation Code, to read:
17207.12. (a) Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the Counties of Los Angeles and San Bernardino as a result of the severe winds that occurred in November 2011.
(b) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to extension, for the taxable year in which the disaster occurred.
(c) Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
SEC. 2. Section 24347.12 is added to the Revenue and Taxation Code, to read:
24347.12. (a) Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the Counties of Los Angeles and San Bernardino as a result of the severe winds that occurred in November 2011.
(b) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to extension, for the taxable year in which the disaster occurred.
(c) Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
SEC. 3. The Legislature finds and declares that this act fulfills a statewide public purpose because all of the following:
(a) On December 9, 2011, the Governor of California made a finding that conditions of extreme peril to public health and safety to persons and property existed due to the severe winds occurring in November 2011 in the Counties of Los Angeles and San Bernardino and proclaimed a state of emergency to exist within those counties, thus qualifying affected persons for various forms of governmental assistance and relief.
(b) This act is consistent with, and supplements, the proclaimed disaster assistance and relief by providing necessary tax relief to the affected jurisdiction and persons to allow them to maintain essential basic services and repair damage to, and restore, their homes and businesses.
SEC. 4. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.
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Ch. 284 — 2 —
This information was provided to the Chamber and its members by Katie Gagnon, Director of Public Policy, San Gabriel Valley Economic Partnership.
Phone (626) 856-3400 Fax (626) 856-5115 www.valleyconnect.com