Taxes are due soon, and you could be missing deductions or credits that could save you money! There are federal tax deductions and relief for those who experienced loss due to a federally declared disaster. Additionally, several states provide tax credits or deductions for retrofitting or mitigating your home to the wind and rain or for having and using a catastrophe savings account.
Use the following links as a guide and consult a tax professional about how these may affect your tax situation.
If you had any disaster losses in 2022, they could be deducted. “A disaster loss is a loss that is attributable to a federally declared disaster, and that occurs in an area eligible for assistance pursuant to the Presidential declaration.” If you suffered a disaster loss, you are eligible to claim a casualty loss deduction and elect to claim the loss in the preceding tax year. You can use this link to check if your area qualifies.
Federal - Capital Improvement
A FORTIFIED Roof™ or any new roof qualifies as a capital improvement to your house. Additionally, if your home sustained damage in any natural disaster, any work you did to restore your home is a capital improvement. Ensure you save all receipts and invoices because you can be exempted from the profit when you sell your home.
Federal - Disaster Tax Relief
The IRS provides tax relief for those that suffered a loss due to specific storms and natural disasters. There is a list of the disasters that qualify, click here to see them.
Alabama - Retrofit Tax Credit
When mitigating your home or business, you can deduct up to $3,000 or 50% of the cost of the work, whichever is less on your State taxes. Any costs associated with upgrading your roof to FORTIFIED qualify you for this credit.
Alabama - Catastrophe Savings Account Deduction
A catastrophe savings account is a regular savings or money market account to cover repair costs and losses relating to damage to the taxpayer’s principal residence in Alabama caused by a catastrophic storm or flood not covered by insurance. The deduction amount varies based on your homeowners' insurance deductible. Read the FAQ here.
If you upgraded your home to the State Uniform Construction Code, you could deduct 50% or $5,000 of the cost from your State taxes. Installing a FORTIFIED Roof™ qualifies you for this deduction, but only if your house did not have pre-existing damage.
Mississippi - Catastrophe Savings Account Deduction
The amounts contributed to a Catastrophe Savings Account, interest income earned on a Catastrophe Savings Account, and distributions from a Catastrophe Savings Account are excluded from the Mississippi taxable gross income of the account holder. The deduction amount varies based on your homeowners’ deductible.
South Carolina - Tax Credits for Fortification Measures
There are two parts. The first is the Tax Credit for Retrofit Project Costs, where the maximum tax credit is limited to 25% of the total costs incurred or $1,000, whichever is less. The other half is the Tax Credit for Retrofit Supplies which allows SC taxpayers a credit of up to $1,500 against the state sales or use taxes paid on purchases of tangible personal property used in a qualified fortification project.