| Publication 4492-A |
2008 Tax Year |
Publication 4492-A - Main Contents
The following definitions are used throughout this publication.
The Kansas disaster area covers the Kansas counties of Barton, Clay, Cloud, Comanche, Dickinson, Edwards, Ellsworth, Kiowa,
Leavenworth, Lyon,
McPherson, Osage, Osborne, Ottawa, Phillips, Pottawatomie, Pratt, Reno, Rice, Riley, Saline, Shawnee, Smith, and Stafford.
The term “storms and tornadoes” as used in this publication, refers to the storms and tornadoes that began on
May 4, 2007, and affected the Kansas disaster area (defined above).
Casualty and Theft Losses
The following paragraphs explain changes to casualty and theft losses that occurred in the Kansas disaster area.
Limits on personal casualty or theft losses in the Kansas disaster area.
Losses of personal use property that arose in the Kansas disaster area after May 3, 2007, are not subject to the $100
or 10% of adjusted gross
income limits. Qualifying losses include losses from casualties and thefts that arose in the disaster area and that were attributable
to the storms
and tornadoes.
When to deduct the loss.
Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered.
However, the Kansas disaster
area is a Presidentially declared disaster. Therefore, you could have elected to deduct losses from these storms and tornadoes
on your tax return for
the previous year. The deadline for making this election has expired.
The following special instructions explain how to complete your forms if you deduct the loss in 2007 or elected to
deduct the loss in 2006.
Special instructions for individuals who file Form 4684 to claim a Kansas disaster area casualty or theft loss for 2007 or
are amending their 2006 return.
Individuals filing or amending their 2007 tax return or amending their 2006 tax return for casualty or theft losses
that were attributable to the
storms and tornadoes should enter “ Kansas Disaster Area” at the top of Form 1040 or 1040X. They must also complete and attach the 2006 version of
Form 4684 for either year and enter “ Kansas Disaster Area” on the top and on the dotted line next to line 11 and enter -0- on line 11.
Individuals filing or amending their 2007 tax return should cross out “ 2006” and enter “ 2007” at the top of Form 4684. They must also enter
the amount from line 21 of that form on line 20 of Schedule A (Form 1040).
Replacement Period for Nonrecognition of Gain
Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned,
and you receive other
property or money in payment, such as insurance or a condemnation award. Generally, you do not have to report a gain (if any)
if you replace the
property within 2 years (4 years for a main home in a Presidentially declared disaster area). However, for property that was
involuntarily converted
after May 3, 2007, as a result of the storms and tornadoes, a 5-year replacement period applies if substantially all of the
use of the replacement
property is in the Kansas disaster area. For more information, see the Instructions for Form 4684.
Qualified recovery assistance loss.
Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. However, the portion
of an NOL that is a qualified
recovery assistance loss can be carried back to the 5 tax years before the NOL year. In addition, the 90% limit on the alternative
tax NOL deduction
(ATNOLD) does not apply to such portion of the ATNOLD.
A qualified recovery assistance loss is the smaller of:
-
The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or
-
The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year):
-
Qualified recovery assistance casualty loss (as defined below),
-
Moving expenses paid or incurred after May 3, 2007, and before January 1, 2010, for the employment of an individual whose
main home was in
the Kansas disaster area before May 4, 2007, who was unable to remain in that home because of the storms and tornadoes, and
whose main job location
(after the move) is in the Kansas disaster area,
-
Temporary housing expenses paid or incurred after May 3, 2007, and before January 1, 2010, to house employees of the taxpayer
whose main job
location is in the Kansas disaster area,
-
Depreciation or amortization allowable for any qualified recovery assistance property (even if you elected not to claim the
special recovery
assistance depreciation allowance for such property) for the year placed in service, and
-
Repair expenses (including expenses for the removal of debris) paid or incurred after May 3, 2007, and before January 1, 2010,
for any
damage from the storms and tornadoes to property located in the Kansas disaster area.
Qualified recovery assistance casualty loss.
A qualified recovery assistance casualty loss is any deductible section 1231 loss of property located in the Kansas
disaster area if the loss was
caused by the storms and tornadoes. For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary
conversion caused
by the storms and tornadoes of property located in the Kansas disaster area. Any such loss taken into account in figuring
your qualified recovery
assistance loss is not eligible for the election to be treated as having occurred in the previous tax year.
Amended return.
If you have already filed your 2007 tax return and then carried your NOL back 2 years, you may file an amended return
to carry back for 5 years
your NOL attributable to a qualified recovery assistance loss.
More information.
For more information on NOLs, see Publication 536.
IRAs and Other Retirement Plans
New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for individuals who suffered
economic losses as
a result of the storms and tornadoes.
Qualified recovery assistance distribution.
Except as provided below, a qualified recovery assistance distribution is any distribution you received and designated
as such from an eligible
retirement plan if all of the following apply.
-
The distribution was made after May 3, 2007, and before January 1, 2009.
-
Your main home was located in the Kansas disaster area on May 4, 2007.
-
You sustained an economic loss because of the storms and tornadoes. Examples of an economic loss include, but are not limited
to:
-
Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other
cause;
-
Loss related to displacement from your home; or
-
Loss of livelihood due to temporary or permanent layoffs.
If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required
minimum distributions) from
an eligible retirement plan as a qualified recovery assistance distribution, regardless of whether the distribution was made
on account of the storms
and tornadoes. Qualified recovery assistance distributions are permitted without regard to your need or the actual amount
of your economic loss.
The total of your qualified recovery assistance distributions from all plans is limited to $100,000. If you have distributions
in excess of
$100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you may allocate the $100,000 limit among the
plans any way you choose.
A reduction or offset after May 3, 2007, of your account balance in an eligible retirement plan in order to repay
a loan can also be designated as
a qualified recovery assistance distribution.
Eligible retirement plan.
An eligible retirement plan can be any of the following.
-
A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan).
-
A qualified annuity plan.
-
A tax-sheltered annuity contract.
-
A governmental section 457 deferred compensation plan.
-
A traditional, SEP, SIMPLE, or Roth IRA.
Main home.
Generally, your main home is the home where you live most of the time. A temporary absence due to special circumstances,
such as illness,
education, business, military service, evacuation, or vacation, will not change your main home.
Taxation of Qualified Recovery Assistance Distributions
Qualified recovery assistance distributions are included in income in equal amounts over three years. However, if you elect,
you can include the
entire distribution in your income in the year it was received.
Qualified recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain
distributions from
SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). However, any distributions you receive
in excess of the $100,000
qualified recovery assistance distribution limit may be subject to the additional tax on early distributions.
For more information, see How To Report Qualified Recovery Assistance Distributions on page 4.
Repayment of Qualified Recovery Assistance Distributions
If you choose, you generally can repay any portion of a qualified recovery assistance distribution that is eligible for tax-free
rollover treatment
to an eligible retirement plan. Also, you can repay a qualified recovery assistance distribution made on account of a hardship
from a retirement plan.
However, see Exceptions below for qualified recovery assistance distributions you cannot repay.
You have three years from the day after the date you received the distribution to make a repayment. Amounts that are repaid
are treated as a
qualified rollover and are not included in income. Also, for purposes of the one-rollover-per-year limitation for IRAs, a
repayment to an IRA is not
considered a qualified rollover. See Form 8915 for more information on how to report repayments.
Exceptions.
You cannot repay the following types of distributions.
-
Qualified recovery assistance distributions received as a beneficiary (other than a surviving spouse).
-
Required minimum distributions.
-
Periodic payments (other than from an IRA) that are for:
-
A period of 10 years or more,
-
Your life or life expectancy, or
-
The joint lives or joint life expectancies of you and your beneficiary.
How To Report Qualified Recovery Assistance Distributions
You will need the following information to correctly report any 2007 or 2008 qualified recovery assistance distributions.
2007 Qualified Recovery Assistance Distributions
If you received a distribution after May 3, 2007, from an eligible retirement plan, you may be able to designate it as a qualified
recovery
assistance distribution. See Qualified recovery assistance distribution on page 3.
If you have not filed your 2007 income tax return, see Form 8915 and Form 8606 on this page to see how to complete
these forms for any qualified recovery assistance distributions. Be sure to attach Form 8915 and Form 8606 (if required) to
your 2007 income tax
return.
If you have filed your 2007 income tax return, you will need to amend your return to designate any distributions as qualified recovery
assistance distributions. You can amend your 2007 income tax return by using Form 1040X. You will need to complete and attach
Form 8915 and Form 8606
(if required) to your amended income tax return for any qualified recovery assistance distributions. See Form 8915 and Form 8606
on this page.
Form 8915.
For a 2007 qualified recovery assistance distribution, complete the 2005 Form 8915, Qualified Hurricane Retirement
Plan Distributions and
Repayments. Before you complete the form, modify the form as follows.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out
“2005” and enter “2007.”
-
In Part I, at the top of column (a), cross out “2005” and enter “2007.”
-
In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance.” On lines 10 and 11, cross out “2005” and
enter “2007.”
-
In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance.” On line 12, cross out “hurricane” and enter
“recovery assistance.” On lines 13 and 14, cross out “line 15b” and “line 25b.” On lines 18 and 19, cross out “2005” and enter
“2007.”
You can now complete Form 8915. For the instructions, use the applicable dates and terms in this publication instead
of those used in the 2005 Form
8915 instructions. See Example 1 on page 5 to see how to complete Form 8915.
Form 8606.
For a 2007 qualified recovery assistance distribution, complete or amend the 2007 Form 8606, Nondeductible IRAs. Before
you complete or amend the
form, use the following additional instructions.
Form 8606, Part I.
-
On line 6, subtract any repayments of qualified recovery assistance distributions from the amount you would otherwise enter
on line 6. Do
not enter an amount less than -0-.
-
Include on line 7 the amount of any qualified recovery assistance distributions that you received even if they were later
repaid.
-
Complete line 15 as follows.
-
If all of your distributions are qualified recovery assistance distributions, enter the amount from line 15 on Form 8915,
line 13. Do not
enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b.
-
If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount
on line 15 by a
fraction. The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the
amount from Form 8606,
line 7. Enter the result in the white space in the bottom margin of the form under line 15. To the left of this amount, enter
“Qualified recovery
assistance distributions” and also enter this amount on Form 8915, line 13. Then, subtract this amount from the amount on line 15 and include the
result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Also, enter this amount on Form 8606 under
your qualified recovery
assistance distributions. To the left of this amount, enter “Other distributions.”
Form 8606, Part III.
-
Include on line 19 the amount of any qualified recovery assistance distributions that you received even if they were later
repaid.
-
Complete line 25 as follows.
-
If all of your distributions are qualified recovery assistance distributions, enter the amount from line 25 on Form 8915,
line 14. Do not
enter this amount on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b.
-
If you have qualified recovery assistance distributions as well as other distributions, you will need to multiply the amount
on line 25 by a
fraction. The numerator of the fraction is your total qualified recovery assistance distributions and the denominator is the
amount from Form 8606,
line 21. Enter the result in the white space in the bottom margin of the form under line 25. To the left of this amount, enter
“Qualified recovery
assistance distributions” and also enter this amount on Form 8915, line 14. Then, subtract this amount from the amount on line 25 and include the
result on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. Also, enter this amount on Form 8606 under
your qualified recovery
assistance distributions. To the left of this amount, enter “Other distributions.”
Example 1.
On May 4, 2007, Margaret Maple lost her home due to the tornadoes on that day. Her home was located in the Kansas
disaster area. On July 31, 2007,
Margaret took out $30,000 from her 401(k) plan and an additional $15,000 from her traditional IRA in order to rebuild her
home. Margaret has not filed
her 2007 return yet but would like to designate the $45,000 in distributions from her retirement plans as qualified recovery
assistance distributions.
Since the distributions occurred in 2007, Margaret would modify and complete the 2005 Form 8915 as discussed on page 4. Margaret
would also need to
complete Form 8606 since her distribution from her traditional IRA has nondeductible contributions from previous years.
In addition to the $15,000 qualified recovery assistance distribution on July 31, 2007, Margaret received an additional
distribution of $15,000
from her traditional IRA on October 31, 2007, that she did not designate as a qualified recovery assistance distribution.
Because Margaret has a
qualified recovery assistance distribution as well as a distribution not so designated, Margaret must allocate the amount
on Form 8606, line 15 to
both distributions, as discussed earlier. Margaret's qualified recovery assistance distributions are $13,125 ($26,250 × $15,000
÷
$30,000). Margaret enters in the white space in the bottom margin of Form 8606, the following, “ Qualified recovery assistance distributions
$13,125.” This amount is then reported on Form 8915, line 13. Below this entry, Margaret enters “ Other distributions $13,125,” and includes
this amount on Form 1040, line 15b. See Margaret's modified 2005 Form 8915 and 2007 Form 8606 shown on pages 6 through 8.
2008 Qualified Recovery Assistance Distributions
If you received a distribution in 2008 from an eligible retirement plan, you may be able to designate it as a qualified recovery
assistance
distribution. See Qualified recovery assistance distribution on page 3. You will need to complete and attach Form 8915 and Form 8606 (if
required) to your 2008 income tax return for any qualified recovery assistance distributions. See Form 8915 and Form 8606 below.
Form 8915.
For a 2008 qualified recovery assistance distribution, you will need to complete the 2006 Form 8915. Before you complete
the form, modify the form
as follows.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out
“2006” and enter “2008.”
-
In the first sentence of Part I and on line 1, cross out “hurricane” and enter “recovery assistance,” cross out “2006” and
enter “2008,” and cross out “2005” and enter “2007.” At the top of column (a) cross out “2006” and enter “2008.”
-
In Part II, cross out “Hurricane” in the title and enter “Recovery Assistance.” On lines 12, 14, and 15, cross out “2005” and
enter “2007.” On lines 17 and 19, cross out “2006” and enter “2008.”
-
In Part III, cross out “Hurricane” in the title and enter “Recovery Assistance.” On line 21, cross out “hurricane” and enter
“recovery assistance.” On lines 22 and 23, cross out “line 15b” and “line 25b.” On lines 27, 29, and 30, cross out “2005” and
enter “2007.” On lines 32 and 34, cross out “2006” and enter “2008.”
You can now complete Form 8915. For the instructions, use the applicable dates and terms in this publication instead
of those used in the 2006 Form
8915 instructions.
Example 2.
On June 15, 2008, Margaret Maple, from the previous example, took out $15,000 from her 401(k) plan that she is designating
as a qualified recovery
assistance distribution. Since the distribution occurred in 2008, Margaret would modify and complete the 2006 Form 8915 as
discussed above. Also,
since Margaret is including her 2007 recovery assistance distributions in income over 3 years, she reports the applicable
amount of those
distributions on the modified 2006 Form 8915. See Margaret's modified 2006 Form 8915 shown on pages 9 and 10.
Form 8606.
For a 2008 qualified recovery assistance distribution, you may need to complete the 2008 Form 8606. Before you complete
Form 8606, use the
additional instructions outlined in Form 8606, Part I, on page 4 and Form 8606, Part III, on this page.
Repayment of Qualified Distributions for the Purchase or Construction of a Main Home
If you received a qualified distribution to purchase or construct a main home in the Kansas disaster area, you can repay part
or all of that
distribution after May 3, 2007, but no later than October 22, 2008, to an eligible retirement plan. For this purpose, an eligible
retirement plan is
any plan, annuity, or IRA to which a qualified rollover can be made.
To be a qualified distribution, the distribution must meet all of the following requirements.
-
The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract,
or a
qualified first-time homebuyer distribution from an IRA.
-
The distribution was received after November 4, 2006, and before May 5, 2007.
-
The distribution was to be used to purchase or construct a main home in the Kansas disaster area that was not purchased or
constructed
because of the storms and tornadoes.
Amounts that are repaid before October 23, 2008, are treated as a qualified rollover and are not included in income. Also,
for purposes of the
one-rollover-per-year limitation for IRAs, a repayment to an IRA is not considered a qualified rollover.
A qualified distribution not repaid before October 23, 2008, may be taxable for 2006 or 2007 and subject to the additional
10% tax (or the
additional 25% tax for certain SIMPLE IRAs) on early distributions.
You must file Form 8915 if you received a qualified distribution that you repaid, in whole or in part, before October 23,
2008. See How to
report, next, for information on completing Form 8915.
How to report.
To report the repayment of a qualified distribution for the purchase or construction of a main home that was not purchased
or constructed due to
the storms and tornadoes, use the 2005 Form 8915, Part IV. Before you complete the form, modify the form as follows.
-
Cross out “Hurricane” in the title at the top of the form and enter “Recovery Assistance.” To the right of the title, cross out
“2005” and enter “2006” or “2007.” Enter only the year the distribution was received.
-
Cross out “Hurricane” in the title of Part IV and enter “Kansas.”
-
In the sentence below the title of Part IV, cross out “March 1, 2006” and enter “October 23, 2008.”
-
On line 24, cross out “March 1, 2006” and enter “October 23, 2008.”
You can now complete Part IV of Form 8915. Use the applicable dates and terms in this publication instead of those used in
the 2005 Form 8915
instructions to complete the form. Attach Form 8915 to your original or amended return for the year of the distribution.
Amended return.
If you repay part or all of a qualified distribution by October 22, 2008, you will need to file an amended return
for that part of a distribution
that was previously included in income.
Loans From Qualified Plans
The following benefits are available to qualified individuals.
Qualified individual.
You are a qualified individual if your main home on May 4, 2007, was located in the Kansas disaster area and you had
an economic loss because of
the storms and tornadoes. Examples of an economic loss include, but are not limited to:
-
Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other
cause;
-
Loss related to displacement from your home; or
-
Loss of livelihood due to temporary or permanent layoffs.
Limits on plan loans.
The $50,000 limit for distributions treated as plan loans is increased to $100,000. In addition, the limit based on
50% of your vested accrued
benefit is increased to 100% of that benefit. If your home was located in the Kansas disaster area, the higher limits apply
only to loans received
during the period beginning on May 22, 2008, and ending on December 31, 2008.
One-year suspension of loan payments.
Payments on plan loans outstanding after May 3, 2007, may be suspended for 1 year by the plan administrator. To qualify
for the suspension, the due
date for any loan payment must occur during the period beginning on May 4, 2007, and ending on December 31, 2008.
Additional Tax Relief for Businesses
Special Depreciation Allowance
You can take a special depreciation allowance for qualified recovery assistance property (as defined below) you acquire after
May 4, 2007. The
special allowance is an additional deduction of 50% of the property's depreciable basis (after any section 179 deduction and
before figuring your
regular depreciation deduction). The special allowance applies only for the first year the property is placed in service.
The special allowance is deductible for both the regular tax and the alternative minimum tax (AMT). There is no AMT adjustment
required for any
depreciation figured on the remaining basis of the property.
You can elect not to deduct the special allowance for qualified recovery assistance property. If you make this election for
any property, it
applies to all property in the same class placed in service during the year.
Qualified recovery assistance property.
Property that qualifies for the special allowance for qualified recovery assistance property includes the following.
-
Tangible property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years
or
less.
-
Water utility property.
-
Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and
has not been
substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated
under MACRS.)
-
Qualified leasehold improvement property.
-
Nonresidential real property and residential rental property.
For more information on this property, see Publication 946.
Other tests to be met.
To be qualified recovery assistance property, the property must also meet all of the following tests.
-
You must have acquired the property, by purchase, after May 4, 2007, but only if no binding written contract for the acquisition
was in
effect before
May 5, 2007.
-
The property must be placed in service before 2009 (2010 in the case of nonresidential real property and residential rental
property).
-
Substantially all of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or
business in the
Kansas disaster area.
-
The original use of the property in the Kansas disaster area must begin with you after May 4, 2007. Used property can be qualified
recovery
assistance property if it has not previously been used within the Kansas disaster area. Also, additional capital expenditures
you incurred after May
4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas
disaster area began with
you.
Excepted property.
Qualified recovery assistance property does not include any of the following.
-
Property required to be depreciated using the Alternative Depreciation System (ADS).
-
Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103.
-
Property for which you are claiming a commercial revitalization deduction.
-
Property in the same class as that for which you elected not to claim the special allowance for qualified recovery assistance
property.
-
Property placed in service and disposed of in the same tax year.
-
Property converted from business use to personal use in the same tax year it is placed in service. Property converted from
personal use to
business use in the same or later tax year may be qualified recovery assistance property.
Recapture of special allowance.
If, in any year after the year you claim the special allowance, the property ceases to be qualified recovery assistance
property, you may have to
recapture as ordinary income any excess benefit you received from claiming the special allowance.
Amended return.
If you have already filed your tax return, you may have to amend that return to claim any special allowance. Additional
guidance will be published
on how you may claim, or elect not to claim, the special allowance if you have already filed your tax return.
Increased Section 179 Deduction
An increased section 179 deduction is allowable for qualified section 179 recovery assistance property (as defined later)
placed in service in the
Kansas disaster area.
Increased dollar limit.
The limit on the section 179 deduction ($125,000 for 2007, $250,000 for 2008) is increased by the smaller of:
The amount for which you can make the election is reduced if the cost of all section 179 property you placed in service
during the year exceeds
$500,000 for 2007 and $800,000 for 2008 increased by the smaller of:
Qualified section 179 recovery assistance property.
Qualified section 179 recovery assistance property is section 179 property that is qualified recovery assistance property
(explained earlier under
Special Depreciation Allowance). Section 179 property does not include nonresidential real property or residential rental property. For
more information, including the requirements that must be met for property to qualify for the section 179 deduction, see chapter
2 of Publication 946.
Amended return.
If you have already filed your tax return, you may have to amend that return for any increased section 179 deduction.
Employee Retention Credit
An eligible employer who conducted an active trade or business in the Kansas disaster area can claim the employee retention
credit. The credit is
40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). Generally,
you must reduce your
deduction for salaries and wages by the amount of this credit (before the tax liability limit). Use Form 5884-A to claim the
credit. See Form
5884-A later. The following rules and definitions apply.
Employers affected by the storms and tornadoes.
The following definitions apply to employers affected by the storms and tornadoes.
Eligible employer.
For this purpose, an eligible employer is any employer who meets all of the following.
-
Employed an average of not more than 200 employees on business days during the tax year before May 4, 2007.
-
Conducted an active trade or business on May 4, 2007, in the Kansas disaster area.
-
Whose trade or business was inoperable on any day after May 4, 2007, and before January 1, 2008, because of damage caused
by the storms and
tornadoes.
Eligible employee.
For this purpose, an eligible employee is an employee whose principal place of employment on May 4, 2007, with the
eligible employer was in the
Kansas disaster area. An employee is not an eligible employee for purposes of the storms and tornadoes if the employee is
treated as an eligible
employee for the work opportunity credit.
Qualified wages.
Qualified wages are wages you paid or incurred before January 1, 2008, (up to $6,000 per employee) for an eligible
employee beginning on the date
your trade or business first became inoperable at the employee's principal place of employment immediately before May 4, 2007,
and ending on the date
your trade or business resumed significant operations at that place. In addition, the wages must have been paid or incurred
after May 4, 2007.
This includes wages paid even if the employee performed no services, performed services at a place of employment
other than the principal place of
employment, or performed services at the principal place of employment before significant operations resumed.
Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax
Act (FUTA). Qualified wages also
include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. Qualified
wages for any employee
must be reduced by the amount of any work supplementation payment you received under the Social Security Act.
For agricultural employees, if the work performed by any employee during more than half of any pay period qualified
under FUTA as agricultural
labor, that employee's wages subject to social security and Medicare taxes are qualified wages. For a special rule that applies
to railroad employees,
see section 51(h)(1)(B).
Qualified wages do not include the following.
-
Wages paid to your dependent or a related individual. See section 51(i)(1).
-
Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job
training
program.
-
Wages for services of replacement workers during a strike or lockout.
Form 5884-A.
Use Section A of Form 5884-A (Rev. October 2006) to claim the employer retention credit. Section B does not apply
to the Kansas disaster area.
Before you complete the form, modify the form as follows.
-
Cross out “Hurricane Katrina, Rita, or Wilma” in the title at the top of the form and enter “Kansas Storms and Tornadoes.”
-
On line 1a cross out “Hurricane Katrina” and enter “Kansas Storms and Tornadoes,” cross out “August 28, 2005,” and enter
“May 4, 2007,” and cross out “January 1, 2006,” and enter “January 1, 2008.”
Complete the form as instructed. Lines 1b and 1c do not apply. Include the amount from Form 5884-A, line 4 in the
amount entered on Form 3800, line
1x. On the dotted line to the left of line 1x, enter “ 5884-A.” Use the applicable dates and terms in this publication instead of those used in
the Form 5884-A instructions.
Amended return.
You may have to amend a previously filed return to claim the employee retention credit.
Demolition and Clean-up Costs
You can elect to deduct 50% of any qualified recovery assistance clean-up costs for the tax year in which the costs are paid
or incurred, instead
of capitalizing them. Qualified recovery assistance clean-up costs are any amounts paid or incurred after May 3, 2007, and
before January 1, 2010, for
the removal of debris from, or the demolition of structures on, real property located in the Kansas disaster area that is:
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Held by you for use in a trade or business or for the production of income, or
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Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business.
Amended return.
If you have already filed your tax return, you may have to amend that return to claim the 50% of any qualified recovery
assistance clean-up costs.
Request for Copy or Transcript of Tax Return
Request for copy of tax return.
You can use Form 4506 to order a copy of your tax return. Generally, there is a $39.00 fee (subject to change) for
requesting each copy of a tax
return. If your main home, principal place of business, or tax records are located in a Presidentially declared disaster area,
the fee will be waived
if the assigned disaster designation (for example, “ Kansas Storms”) is written in red across the top of the form when filed.
Request for transcript of tax return.
You can use Form 4506-T to order a free transcript of your tax return. A transcript provides most of the line entries
from a tax return and usually
contains the information that a third party requires. You can also call 1-800-829-1040 to order a transcript.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from
the IRS in several
ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate.
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers
who are experiencing economic
harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that
an IRS system or
procedure is not working as it should.
You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059
to see if you are eligible for
assistance. You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your
local telephone directory
and in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS. You can file Form 911, Request for Taxpayer Advocate
Service
Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. For more
information, go to
www.irs.gov/advocate.
Low Income Taxpayer Clinics (LITCs).
LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies
with the IRS for free or for
a nominal charge. The clinics also provide tax education and outreach for taxpayers who speak English as a second language.
Publication 4134, Low
Income Taxpayer Clinic List, provides information on clinics in your area. It is available at
www.irs.gov or your local IRS office.
Free tax services.
To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains lists of
free tax information sources,
including publications, services, and free tax education and assistance programs. It also has an index of over 100 TeleTax
topics, (recorded tax
information) you can listen to on your telephone.
Accessible versions of IRS published products are available on request in a variety of alternative formats for people
with disabilities.
Free help with your return.
Free help in preparing your return is available nationwide from IRS-trained volunteers. The Volunteer Income Tax Assistance
(VITA) program is
designed to help low-income taxpayers and Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age
60 and older with their tax
returns. Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you
may be entitled to claim.
To find a site near you, call 1-800-829-1040. Or to find the nearest AARP TaxAide site, visit AARP's website at
www.aarp.org/taxaide or call 1-888-227-7669. For more information
on these programs, go to
www.irs.gov and enter keyword “ VITA” in the upper right-hand corner.
Internet. You can access the IRS website at
www.irs.gov 24 hours a day, 7 days a week to:
-
E-file your return. Find out about commercial tax preparation and e-file services available free to eligible
taxpayers.
-
Check the status of your refund. Click on Where's My Refund. Wait at least 6 weeks from the date you filed your return (3 weeks
if you filed electronically). Have your tax return available because you will need to know your social security number, your
filing status, and the
exact whole dollar amount of your refund.
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Download forms, instructions, and publications.
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Order IRS products online.
-
Research your tax questions online.
-
Search publications online by topic or keyword.
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View Internal Revenue Bulletins (IRBs) published in the last few years.
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Figure your withholding allowances using the withholding calculator online at
www.irs.gov/individuals.
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Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
Phone. Many services are available by phone.
-
Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications,
and prior-year forms and instructions. You should receive your order within 10 days.
-
Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
-
Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An
employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local
Taxpayer Assistance Center
for an appointment. To find the number, go to
www.irs.gov/localcontacts or
look in the phone book under United States Government, Internal Revenue Service.
-
TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and
publications.
-
TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
-
Refund information. To check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information or call
1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically).
Have your tax return
available because you will need to know your social security number, your filing status, and the exact whole dollar amount
of your refund.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we
use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen
in on or record random
telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
-
Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and
publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions,
and office supply stores
have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and
libraries have the
Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
-
Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An
employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need
to resolve a tax problem,
have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone
in person, visit your
local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No
appointment is necessary
— just walk in. If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax
account issue. A
representative will call you back within 2 business days to schedule an in-person appointment at your convenience. If you
have an ongoing, complex tax
account problem or a special need, such as a disability, an appointment may be requested. All other issues will be handled
without an appointment. To
find the number of your local office, go to
www.irs.gov/localcontacts or
look in the phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for forms, instructions, and publications to the address below. You should receive a response within
10
days after your request is received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
CD/DVD for tax products. You can order Publication 1796, IRS Tax Products CD/DVD, and obtain:
-
Current-year forms, instructions, and publications.
-
Prior-year forms, instructions, and publications.
-
Bonus: Historical Tax Products DVD - Ships with the final release.
-
IRS Tax Map: an electronic research tool and finding aid.
-
Tax law frequently asked questions (FAQ).
-
Tax Topics from the IRS telephone response system.
-
Fill-in, print, and save features for most tax forms.
-
Internal Revenue Bulletins.
-
Toll-free and email technical support.
-
The CD/DVD is released twice during the year in January and March.
Purchase the CD/DVD from National Technical Information Service (NTIS) at
www.irs.gov/cdorders for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5
handling fee). Price is subject to change.
CD for small businesses. Publication 3207, The Small Business Resource Guide CD, is a must for every small business owner or any
taxpayer about to start a business. This year's CD includes:
-
Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
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All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes.
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Tax Map: an electronic research tool and finding aid.
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Web links to various government agencies, business associations, and IRS organizations.
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“Rate the Product” survey—your opportunity to suggest changes for future editions.
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A site map of the CD to help you navigate the pages of the CD with ease.
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An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan,
and filing taxes.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or
by visiting
www.irs.gov/smallbiz.
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