Question: Does the state tax department plan to host any workshops, seminars or webinars for Maui wildfire survivors on tax filing for the 2023 tax year? Apparently, there are a lot of factors for people in disaster zones to consider, about potential benefits on filing certain ways. Will DOTAX be providing more guidance for these folks, who may have received various disaster aid, insurance payments, etc., and experienced large losses in 2023?
Answer: Hawaii’s Department of Taxation held its 2023 workshops in all counties in November. Although the annual fee-based workshops are designed for tax preparers and practitioners earning continuing professional education credits, they were also open to the general public. “Several tax practitioners asked for information specific to the wildfires on Maui and Hawaii counties,” Gary H. Yamashiroya, a DOTAX spokesperson, said in an email.
The department doesn’t have other workshops scheduled at this time, but “DOTAX continues to participate in the Disaster Recovery Center on Maui to take any questions Maui taxpayers may have regarding their state taxes, particularly those related to the wildfires,” and the Maui District Office “is always available for inquiries,” he said.
Shortly after the August wildfires, DOTAX published Tax Announcement No. 2023-03 (Amended), describing tax relief for affected taxpayers in Maui and Hawaii counties. It includes information about tax-filing extensions, claiming casualty losses, general excise tax exemptions, qualified disaster relief payments (which don’t count as income) and related topics. Read the announcement at 808ne.ws/3TbRFLL.
The Internal Revenue Service has a vast amount of information on its website for taxpayers affected by federally declared disasters, including the August wildfires on Maui and the Big Island. Go to 808ne.ws/irsdisr for FAQs and links to disaster-related tax relief by state or tax year.
One major topic of concern is casualty loss valuations. The IRS says it cannot address every question about property valuation in the FAQs but that it “wants to express to the public that we recognize the extraordinary damage disasters can cause. We urge taxpayers and tax professionals to act in good faith and make reasonable estimations based on all information available. The IRS considers each situation on a case-by-case basis. We have extensive experience with disaster situations and will be reasonable in determinations. As for lost records, when records are not available or it is not feasible to obtain documentation sufficient to re-create records otherwise required, the IRS will consider documentation requirements satisfied by the best reasonably available information presented in good faith.”
Q: Regarding the Maui wildfires, FEMA won’t pay people with insurance, but what about the insurance deductible? Couldn’t they cover that?
A: “FEMA cannot provide assistance for damage already covered by your insurance, and FEMA does not cover insurance deductibles. However, wildfire losses not covered by your homeowner’s insurance may be eligible for grant funding within the limits of the Individuals and Households Program,” the Federal Emergency Management Agency said in a recent news release. The agency may be able to help if the insurance settlement was less than FEMA’s maximum grant and did not cover all basic disaster-related necessities, or if the insurance claim was denied or if its processing has been delayed more than 30 days.
FEMA encouraged all Hawaii wildfire victims, including those with insurance, to register with FEMA by Monday’s deadline. “For more information about insurance-denial or insurance-settlement matters, call the FEMA Helpline at 800-621-3362,” it said.
FEMA provides only basic assistance to make an eligible disaster victim’s home “safe, accessible and functional” — it doesn’t match high-quality insurance. ”FEMA does not provide replacement-value awards for damaged items or assistance with non-essential items,” it says.
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Write to Kokua Line at Honolulu Star-Advertiser,
500 Ala Moana Blvd.,
Suite 7-500, Honolulu, HI 96813; call 808-529-4773;
or email kokualine@staradvertiser.com.
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The Internal Revenue Service has a vast amount of information on its website for taxpayers affected by federally declared disasters, including the August wildfires on Maui and the Big Island. Go to 808ne.ws/irsdisr for FAQs and links to disaster-related tax relief by state or tax year.
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.
