TAX NEWS - March 2009

Disaster Assistance Tax Credit - Georgia tax

Georgia Department of Revenue
Policy Statement IT-2007-12-07
Disaster Assistance Credit

Purpose

This informational bulletin explains the disaster assistance credit.

Effective Date: December 7, 2007

Supersedes: All previous documents and any oral directives in conflict herewith.


Authority

The Statute

O.C.G.A. § 48-7-29.4 establishes a tax credit, for tax years beginning on or after January 1, 2000, for a taxpayer who receives disaster assistance. O.C.G.A. § 48-7-29.4 states:

a. A taxpayer who receives disaster assistance during a taxable year from the Georgia Emergency Management Agency or the Federal Emergency Management Agency shall be allowed a credit against the tax imposed by Code Section 48-7-20 in an amount equal to $500.00 or the actual amount of such disaster assistance, whichever is less. The commissioner may require adequate supporting documentation showing that the taxpayer received such assistance.

b. In no event shall the total amount of the tax credit under this Code Section for a taxable year exceed the taxpayer's income tax liability. Any unused tax credit shall be allowed the taxpayer against any succeeding years' tax liability. No such credit shall be allowed the taxpayer against any prior years' tax liability.


Scope

A policy statement is intended to provide procedural guidance to the general public and Department personnel. It is a written statement issued to assist in the administration of laws and regulations by providing procedural guidance that may be followed in order to comply with the law. A policy statement does not have the force or effect of law, and is not binding on the public. It is, however, binding on agency personnel until superseded or modified by a change in statute, regulation, court decision, or advisory opinion.


Issue

Issue 1: What type of disaster assistance qualifies for this credit?


Discussion of Issue

GEMA and FEMA coordinate assistance in a federal disaster area from the following sources. All of these would qualify.

a. Grants received from the Department of Human Resources Individual and Family Grant Program.
b. Grants received from FEMA.
c. Loans received from the Small Business Administration.

Issue 2: What type of documentation is required to be submitted with the return when the credit is claimed?

Discussion of Issue

The approval letter that is received from each of the organizations listed in the discussion of Issue 1.