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N.C. storm victims get tax relief

By Kay Bell · Bankrate.com
Tuesday, April 19, 2011
Posted: 3 pm ET

While millions of us were struggling to finish up our tax returns on Monday, April 18, folks in the Southeast had much more difficult and devastating battles on their hands. They were digging out of three days of deadly storms and tornadoes. 

In times like that, nothing matters but finding your loved ones. And taxes definitely were not on anyone's mind in North Carolina, one of the hardest-hit states.

The North Carolina Department of Revenue knows that, so the agency has announced that it will waive late-filing and late-payment penalties for taxpayers who can't file their returns or pay their taxes because of the storms.

The leniency applies to state taxes and returns due between April 18 and May 1.

Unfortunately, interest will still be assessed. State law prevents tax officials from waiving those charges.

But to avoid any penalty fees, when North Carolinians are able to file their taxes, they need to file Form NC-5500 with the late payment or return. The form is available at all Department of Revenue offices or can be downloaded from the tax department's website.

If you need to file this form, be sure to check the block for "natural disaster" and fill in all the required information. If you can't get a form, you can go ahead and file your return late and attach a letter explaining why you missed the filing deadline.

North Carolina taxpayers also can call the revenue office's Taxpayer Assistance Division at (877) 252-3052 for additional information.

As for federal tax returns, there's no official word yet from the Internal Revenue Service.

However, in an interview over the weekend with a Raleigh, N.C., radio station, President Barack Obama said he had spoken with North Carolina Gov. Bev Perdue and "what I assured her is that we're going to do everything that we can to help rebuild. FEMA is already on the ground. It's making its assessments. There’s strong state-federal coordination. And there’s a reason why you budget for these kinds of natural disasters. We're going to have to help folks rebuild and it's going to take a little bit of time. But the people in North Carolina are very resilient, and we’re confident that they're going to make it happen."

So keep an eye out for a formal Washington, D.C., announcement soon that the region has been declared a major disaster area.

When that happens, taxpayers typically get relief that includes additional time to file federal returns and pay any due taxes.

Such a declaration also could allow taxpayers to claim disaster losses on their 2010 tax returns even though the storms struck in 2011.

Time-shifting of the disaster damages for tax purposes could help people affected by the storms to get much needed money to start repairs sooner than if they had to wait until next filing season to claim the losses.

Make sure you don't miss out on any tax news and tips. Subscribe to Bankrate's free Weekly Tax Tip newsletter, which kicks off on April 27.

You also can follow me on Twitter at @taxtweet.

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