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Franchise Tax Board Grants Hurricane Rita Victims State Tax Relief

The Franchise Tax Board today announced special tax relief for California taxpayers affected by Hurricane Rita in the federally declared disaster areas by extending tax filing dates and waiving interest and penalties until the end of February next year.

"The people affected by these hurricanes need to focus on rebuilding their lives and homes, not on filling out their tax forms," said State Controller and FTB Chair Steve Westly.

On September 26, 2005, the IRS granted special relief for taxpayers in nine Texas counties and five Louisiana parishes struck by Hurricane Rita. The IRS extended the due dates for filing tax returns and paying taxes until February 28, 2006, the same extension date that Congress granted to taxpayers affected by Hurricane Katrina. This relief applies to any tax return or tax payment with an original or extended due date falling on or after September 23, 2005. The FTB will also follow these extended dates and will cancel interest and any late filing or late payment penalties that would otherwise apply.

In addition, FTB reminds impacted taxpayers that the normal disaster loss rules apply to victims in the presidentially declared disaster areas. For Hurricane Rita, President Bush issued major disaster declarations covering parts of Texas and Louisiana effective September 23, 2005. Taxpayers can claim a disaster loss in one of two ways. They can either claim the disaster loss in the year the disaster occurred, when they file their 2005 tax return next spring. Or taxpayers can claim the loss in the tax year before the disaster occurred by filing either an amended or original 2004 tax return. The advantage of claiming the disaster loss in the prior year is that the FTB can quickly issue a refund.

Taxpayers claiming the disaster loss should write “Hurricane Rita” in red ink at the top of the tax return to alert the FTB to expedite the refund. If taxpayers are e-filing, they should follow the software instructions to enter the disaster information.

Taxpayers needing copies of state returns to replace lost or damaged ones should complete Form FTB 3516, Request for Copy of Tax Return. Print “Hurricane Rita” in red at the top of the request. Disaster victims receive copies of tax returns for free.

The specific counties in the disaster area can be found on the IRS Website. To learn more about disaster losses, refer to publication FTB 1034, Disaster Loss at www.ftb.ca.gov or the IRS 547, Casualties, Disasters, and Thefts at www.irs.gov. The IRS Website also contains disaster-area relief information for Hurricane Katrina victims.