The Official Website of the Louisiana Department of Revenue
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):
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 the credit.
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.
The credit may only be claimed in the year paid regardless of the due date of your premium. Citizens assessments paid before January 1, 2007, can be claimed on the first income tax return with a due date in 2007. Only LA Citizens assessments actually paid in 2005 or 2006 can be claimed as a credit on a 2006 income tax return. If the homeowner or property owner paid multiple LA Citizens assessments, for example, one in December 2005 and another in December 2006, credit can be claimed for both payments on the 2006 income tax return. Assessments made before January 1, 2007, that were paid in periodic payments to the insurance company (e.g. monthly or quarterly), may be claimed as a credit on the 2006 tax return if the first periodic payment was made before January 1, 2007.
LA Citizens assessments paid on or after January 1, 2007, may be claimed on the 2007 income tax return which is due in 2008. 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.
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.
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.
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.
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.
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.
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.
Louisiana Resident Taxpayers—For 2005, the credit should be claimed on Schedule F, Line 8, of the Louisiana Resident income tax return, Form IT-540. For 2006, the credit should be claimed on Schedule F, Line 9. Both of these lines are entitled “Other Refundable Tax Credits”. Write “LA Citizens Assessments” in the space provided on the respective lines and enter the amount of the credit in the boxes designated. 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.
Nonresident and Part-year Resident Louisiana Taxpayers— For 2005, the credit should be claimed on Schedule F-NR, Line 8, of the Louisiana Nonresident and Part-year Resident income tax return, Form IT-540B. For 2006, the credit should be claimed on Schedule F-NR, Line 9. Both of these lines are entitled “Other Refundable Tax Credits”. Write “LA Citizens Assessments” in the space provided on the respective lines and enter the amount of the credit in the boxes designated. 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.
Assessments Paid On Or After January 1, 2007—The credit 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.
If the taxpayer is using tax preparation software to prepare their 2006 Louisiana Income tax return, the software should prompt you to provide the insurance assessment information contained on the declaration page and the supplemental page.
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.
