Deduction amounts for some flood victims now owed to state - KWWL - Eastern Iowa Breaking News, Weather, Closings

Deduction amounts for some flood victims now owed to state

IOWA CITY (KWWL) - Tax season is here, but for some flood victims like Matt Aschbrenner, that means they'll have to pay extra state taxes.

"Apparently, we owe the State of Iowa, and we're like, 'how do we owe the State of Iowa when we got a refund back from the State of Iowa?'"

He took a flood recovery tax deduction last year, for damages he sustained in the flood. But as it turns out, he ended up owing that back to the state.

"It wasn't a large amount, but it's just the idea of why we had to pay back money," Aschbrenner explained.

It's because at tax time last year, the Iowa legislature was expected to adopt the federal standards for flood recovery tax deductions. But that never happened.

H&R Block tax advisor Linda Wilson says Aschbrenner isn't alone.

"For H&R Block, within the state of Iowa, it was something like 3,000 clients," Wilson said.

The amount those clients owe depends on the amount of last year's deduction. She's seen anywhere from $8 to $3,000.

"We have already helped them to amend their tax returns, to make sure everything is filed correctly with the State of Iowa."

That simply involves filling out a State of Iowa 1040X amendment form.

We asked Representative Kraig Paulsen if it would be possible for lawmakers to address this issue during the current legislative session. His answer: "We could go in and do that; it's going to come down to a question of priorities."

If the legislature passes the change to the tax code, flood victims have three years to file an amended return through the Department of Revenue.

Online Reporter - Brady Smith

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