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Citizens Insurance Tax Credit
Source:
rev.state.la.us
- May 1, 2017
Click here for Form 540-INS – Request for Refund of Louisiana Citizens Property Insurance Corporation Assessment
How do I determine the amount of the credit?
Premium notices that include LA Citizens assessments due to Hurricanes Katrina and Rita are eligible for the credit. The LA Citizens assessments are listed separately from the normal premium amount on the declaration page of your homeowner’s or property’s insurance premium notice. The declaration page names the policyholder, describes the property or liability to be insured, the type of coverage, and policy limits. Some insurance companies may include a supplemental schedule with the declaration page that itemizes the LA Citizens assessments.
LA Citizens assessment charges may include any or all of the following (your insurer’s description may vary slightly from the references below):
Louisiana Citizens FAIR Plan Regular Assessment Recoupment Surcharge
Louisiana Citizens Coastal Plan Regular Assessment Recoupment Surcharge
Louisiana Citizens FAIR Plan Emergency Assessment
Louisiana Citizens Market Equalization Charge
To determine the amount of the credit that can be claimed, add the assessment charges for the four items above. If only one of the items appears on your insurance bill, that amount is the amount of assessment paid. The credit is a percentage of the assessment paid. Starting with assessments paid on or after January 1, 2016, the credit is equal to 25 percent of the assessment paid.
Before the credit can be claimed, the assessment amounts must have been paid to the insurance company directly by the homeowner or property owner or by the homeowner’s or property owner’s escrow company.
This is not a credit for the total amount due on your insurance bill. Do not add your insurance premium to the LA Citizens assessments. If you are a customer of the Louisiana Citizens Insurance Corporation, and you paid the Tax Exempt Surcharge, this surcharge may not be claimed.
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When can the credit be claimed?
The credit may only be claimed in the year paid regardless of the due date of your premium. For example, Citizens assessments paid on January 1, 2016 thru December 31, 2016 may be claimed on the 2016 income tax return which is due in 2017. However, Act 382 of the 2007 Regular Legislative Session amended Revised Statute 47:6025 to allow LA Citizens assessments paid during 2007 and thereafter to be claimed on Form R-540INS at the time of payment.
December 31, 2015 was the last day to file a 2011 income tax return in order to claim a refund of LA Citizens assessments paid in 2011.
NOTE: If you file Form R-540INS to claim the credit for assessments paid on or after January 1, 2007, the credit may not be claimed on the Louisiana income tax return.
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What documents are required to be filed and retained?
Paper returns:
Homeowners or property owners must attach a copy of your homeowner’s or property’s insurance declaration page and any supplemental pages that shows the separate line item charges for the LA Citizens assessments to your returns.
Returns filed electronically:
Homeowners or property owners must retain their homeowner’s or property’s insurance declaration page and any supplemental pages that show the separate line item charges for four years and be able to produce the documents in the case of an audit.
Tax returns prepared by paid preparer:
Taxpayers must bring a copy of their homeowner’s or property’s insurance declaration page and any supplemental pages that shows the separate line item charges for the LA Citizens assessments to their preparer. Preparers may not claim this credit on a taxpayer’s return without this documentation.
Substitute documents:
A substitute document issued by your insurance company that contains the line item LA Citizens assessments will be accepted if the original declaration page is not available.
Retention of documentation of proof of payment:
Individuals must keep any documents showing proof of payment for four years and be able to produce the documents in the case of an audit. Documents that will be accepted as proof of payment include cancelled checks, an image of a check, or an itemized escrow statement.
Individuals who are required to file a Louisiana income tax return
The credit for assessments paid on or after January 1, 2007 can be claimed on the individual income tax return or by filing a "Request for Refund of Louisiana Citizens Property Insurance Corporation Assessment", Form R-540INS after the assessment has been paid. For individuals who had more than one property for which the LA Citizens assessments were paid, Form R-INS Supplement must also be completed. Documentation for each property listed must be attached to the form when it is filed.
NOTE: If you file Form R-540INS to claim the credit for assessments paid on or after January 1, 2007, the credit may not be claimed on the Louisiana income tax return.
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Individuals who are not required to file a Louisiana income tax return
Individuals who are not required to file a Louisiana individual income tax return must file their claim for refund on the "Request for Refund of Louisiana Citizens Property Insurance Corporation (LA Citizens) Assessment, Form R-540INS. A copy of your homeowner’s or property’s insurance declaration page and any supplemental page that shows the charges for the LA Citizens assessment must be attached to the Form R-540INS.
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Individuals who filed a Louisiana income tax return and have not claimed the credit
Taxpayers who already filed a Louisiana income tax and failed to claim the credit, may claim the credit by filing a "Request for Refund of Louisiana Citizens Property Insurance Corporation Assessment", Form R-540INS, instead of amending their tax return. The credit must be claimed on the appropriate form for the year in which the assessment was paid. A separate return must be filed for each year in which you paid an assessment on your homeowner’s policy.
Citizens assessments paid in 2008 can be claimed as a credit on a 2008 Form R-540INS or by amending the 2008 income tax return. Citizens assessments paid in 2009 can be claimed as a credit on a 2009 Form R-540INS or by amending the 2009 income tax return and so on.
You must attach a copy of your insurance declaration page and any supplemental pages, if necessary, to your return for the credit to be allowed. For individuals who had more than one property for which the LA Citizens assessments were paid, Form R-INS Supplement must also be completed and documentation for each property listed must be attached to the form.
NOTE: The credit may not be claimed on both the income tax return and the Request for Refund form. If you claimed the credit on the Louisiana income tax return, the credit may not be claimed on Form R-540INS. If you filed Form R-540INS to claim the credit, the credit may not be claimed on the Louisiana income tax return.
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Forms
R-540INS - Refund Request of LA. Citizens for Property Insurance Corporation Assessment
R-INS Supplement - Supplement Schedule for Refund of Louisiana Citizens Property Insurance Assessment
RIB 07-015 - Credit for the Louisiana Citizens Property Insurance Corporation Assessment
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