Hurricane Ian

[BobRay]

On my 2022 tax return,  I marked Hurricane Ian as a "qualified disaster", but not as a "qualified MAJOR disaster." Due to the Steube bill passing, is it now a "qualified major" disaster?

If not, is there anything I can gain by filing an amended return?

[Vanessa A · Accepted solution]

It depends on your actual situation.  However, if you had expenses that were not allowed when Hurricane Ian was considered a Qualified disaster for tax purposes and now would be allowed with the qualification as a Major disaster, you may have a gain by filing an amended return if after you claimed all other expenses and deductions, you still had taxable income.  

With the change, your losses would be added to your standard deduction to arrive at your taxable income.  So, if you were single, had income of $100,000, and a $12,950 standard deduction in 2022 and qualified Major disaster losses of $90,000, you would no longer have taxable income and would get any taxes back you paid in for that year that was not already refunded.  

If however, you had income of $25,000 and were married filing jointly, you would have had a standard deduction of $25,900, so you would already have no taxable income.  In this situation, you would not gain anything by filing an amended return. 

The losses are a deduction from income, not a tax credit. 

If you are unsure, you can go in and amend your return to see how it impacts you.  

Casualty and Losses Form 4684 Instructions

[BobRay]

Thanks, that's very helpful.

If I'm understanding you, Ian is now a qualified "Major" disaster. Is that correct?

[Opus 17]

@Vanessa A 

Is Turbotax actually updated to handle the changes due to the Disaster Relief Act signed in December 2024?  Can the 2022 version process an amended return correctly?

[DaveF1006]

It depends.  I would suggest filing the 2022 Turbo Tax Amendment and declare it a major disaster.  The Fema code is  DR-4673-FL, which is a code that is used for major disasters.  Prepare the amendment to see if the change has taken place and let us know the outcome.

[BobRay]

Thanks. That  turned out be really simple. The code: DR-4673 hasn't changed. All I had to do was check the "Major Disaster" checkbox on form 4684 and I'm getting a substantial additional refund.

Unfortunately, the changes to my taxable income did not flow to my MN state return (even though the online help says they will). It looks like I'll have to make those changes by hand.

[AmyC]

A new law signed Dec 12, 2024 allows you to claim your 2022 disaster without having to itemize. I am sure the 2022 software hasn't been updated for this new law change. This may affect your situation,  have a read through the new law.

[BobRay]

Thanks Amy,

The program did update itself when I launched it. I marked the checkbox indicating the Ian was a qualified major disaster on the amended return, and the refund went up by more than $2,000. I'm not sure I could tell whether that means the program was updated to handle my situation or not. 

Now, if it would just carry the new taxable income values to my State Return, I'd be a happy camper, but I don't see any way to make that happen, even though the TT help system says it will happen automatically.

[Opus 17]

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@BobRay wrote:

Thanks Amy,

The program did update itself when I launched it. I marked the checkbox indicating the Ian was a qualified major disaster on the amended return, and the refund went up by more than $2,000. I'm not sure I could tell whether that means the program was updated to handle my situation or not. 

Now, if it would just carry the new taxable income values to my State Return, I'd be a happy camper, but I don't see any way to make that happen, even though the TT help system says it will happen automatically.

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Unless your state also changed their law regarding disaster calculations, you may not be entitled to a state recalculation.  It depends on whether the state is "conforming" (follows federal law regarding calculation of taxable income) or differs.

To amend 2022, you must have the program installed on your own computer.  Switch to forms mode or print a draft of your return and look at schedule A, you should see the casualty loss on line 15, and if you use the standard deduction, you will see it on line 16. 

The other problem is that even though Turbotax contains the calculations for a "qualified" disaster loss, the only losses that were qualified (before the signing of the 2024 law) occurred in 2021 or earlier, so there were no qualified losses in 2022.  You have to put the FEMA number of the disaster on form 4684, so the IRS will also have to update their computers internally to process a 2022, 2023 or 2024 FEMA number under the new rules.  I have not heard one way or the other if the IRS is ready for this yet. 

[285antis]

Just tried what you stated and it worked on my amended 2022 return.  Thanks, you are the only one that successfully explained how to do this.  As you correctly stated, the question and answer section of TurboTax was of no use since there were no federal disaster claims for 2022 (not until the law change in December of 2023).  Therefore you have to manually pull in form 4684 and complete.  This will also adjust your schedule A and you will see the adjustments in your itemized or standard deduction.

[BobRay]

As far as I know, my state (Minnesota) is "Conforming,"  but when I try to manually follow the instructions for the state return for 2022, nothing in my state tax form changes. It appears that the state program calculates everything from the Federal AGI, which hasn't changed.

[AmyC]

The amended returns haven't been released so you will have to manually override and move everything in the FORMS mode, if you are intent to get this done before the states are ready to handle. There are a lot of moving parts. You don't want to send your form in before the staff and procedures are trained and ready. 

[BobRay]

Thanks Amy!,

I do see the loss on line 16 of Schedule A and on line 17, the "Itemize anyway" box is unchecked (this is on my 2022 amended return). My refund has increased substantially, so it looks like TurboTax has adjusted to the new law 

I already had the 4684 forms filled in with the correct disaster number (which hasn't changed). 

The question now is whether the IRS is ready to process my amended return. Should I wait to send it in?

[BrittanyS]

When amending your return, you will want to wait until the IRS has accepted the original return.  Also, if you were receiving a refund on the original return, that you have received the refund prior to submitting the amended return.  If both items have occurred, you can submit the amended return when you are ready.

@BobRay 

[BobRay]

Thanks. The return was for 2022, so all that happened quite a while ago.