Tax Blog

In October of 2008, Congress passed the Heartland Disaster Tax Relief Act of 2008, designed to assist the victims of severe storms, flooding, and tornados in the Midwest. This special tax relief applies to taxpayers in areas to which a major disaster was declared by the President between the dates of May 20, 2008 and July, 31, 2008. During last year's severe flooding, President Bush declared 39 Indiana counties disaster areas. See the full list of eligible counties at the end of this post.

Calculate your Tax Break with our Online Heartland Disaster Tac Relief Calculator.

Cash in on this Tax Law when you file at one of Fiscal Tax's 40 Indianapolis Area Locations

John Striewe, President of Fiscal Tax, was recently on Wish TV 8 explaining the program. Here is the video!
 

This legislation contains two major individual tax provisions that will affect several Hoosiers and possibly provide their biggest tax break ever. The first is the expanded EIC and Refundable Child Credit and the second is expanded Education Credits.

The EIC and Refundable Child Credit

This credit permits disaster victims to look at a prior year’s income for purposes of calculating EIC and child credits if it gives them the higher credit. It is only for tax year 2008 and if your income in 2008 decreased or dropped from 2007 you could qualify for an additional $4,999 refund ($4,716 Federal and $283 Indiana).

Tax Example:

As an example Fiscal Tax Company prepared a tax return for a client who had zero income in 2008 and $12,000 income in 2007 and they received a refund of $4,999.

Education Credits

For 2008 and 2009, education credit limits are increased for students attending eligible education institutions in Indiana disaster areas. The limit on the amount of higher education expenses that quality for the Hope credit is doubled. Thus, the maximum credit for 2008 for Indiana students attending school in disasters areas is $3,600. (100% of the of the first $2,400 plus 50% of the next $1,200). The Lifetime Learning credit rate is increased from 20% to 40% of the first $10,000 of qualified expenses (for a Maximum of $4,000). In addition to tuition and fees, qualified expenses also include room, board and books

Eligible Indiana Counties

The 39 Indiana counties affected by this tax break are listed alphabetically below.  All underlined counties have operating Fiscal Tax Office Locations.

• Adams
• Bartholomew
• Brown
• Clay
• Daviess
• Dearborn
• Decatur
• Gibson
• Grant
• Greene
• Hamilton
• Hancock
• Hendricks
• Henry
• Huntington
• Jackson
• Jennings
• Jefferson
• Johnson
• Know
• Lawrence
• Marion
• Monroe
• Morgan
• Owen
• Parke
• Pike
• Posey
• Putnam
• Randolph
• Ripley
• Rush
• Shelby
• Sullivan
• Tippecanoe
• Vermillion
• Washington
• Wayne
• Vigo

Can't take advantage of this tax break?

Check out our list of 40 Tax Breaks that you could use to get your largest tax refund ever in 2009.

Have a question about this tax break?

Leave a comment below and we'll get you an answer that could save you money on your tax return this year.