The North Carolina Department of Revenue will grant relief to affected individual and business taxpayers who are unable to file returns and make timely tax payments due to the destruction caused by Hurricanes Katrina and Rita. The automatic relief granted is similar to the relief granted by the Internal Revenue Service and includes the waiver of late filing and late payment penalties.  Extensions to file tax returns and to make tax payments will be granted to the same extent granted by the Internal Revenue Service. The relief does not include the waiver of interest because North Carolina law does not permit interest to be waived.  For information on specific federal tax relief for taxpayers affected by Hurricanes Katrina and Rita, visit the Internal Revenue Service website, http://www.irs.gov/newsroom/index.html.

A taxpayer eligible for automatic relief should complete Form NC-5500, Request to Waive or Reduce Penalties, write the name of the hurricane on the top right of Form NC-5500, and check the block for natural disaster. The form is available at all Department of Revenue offices and on the Department’s website at: http://www.dor.state.nc.us/downloads/penalty.html.  If you file an electronic return through our online applications on our website, please mail Form NC-5500 immediately after filing.  If you file a paper return, please mail the completed Form NC-5500 with the late return or payment. If the late return is a full-page return, staple Form NC-5500 to the front of the return. If the return is a coupon-size form, mail Form NC-5500 with the return but do not staple the two together.

Although no North Carolina counties have been declared disaster areas as a result of Hurricane Ophelia, the Department will consider granting relief to taxpayers in the following counties on a case by case basis:  Brunswick, Carteret, Craven, Dare, Hyde, Jones, New Hanover, Onslow, Pamlico, and Pender.  Taxpayers requesting relief from penalties should complete Form NC-5500; write “Hurricane Ophelia” on the top right of the form; check the block for natural disaster; and explain how the hurricane prevented timely compliance.  Send the completed Form NC-5500 with the late return or payment.

Taxpayers located in the North Carolina counties shown above, or in the counties declared disaster areas by the President as a result of Hurricanes Katrina and Rita, may elect to claim a disaster-related casualty loss on either their 2004 or 2005 State income tax returns. The election may be made at any time before the due date of the return (without regard to extensions) for the year in which the disaster occurred. Taxpayers claiming the loss on an original or amended 2004 State income tax return should write the name of the hurricane in black ink at the top right of the form so that the return can be readily identified for special handling. Taxpayers who wait to claim the loss on their 2005 returns should also write the name of the hurricane in black ink at the top right of the form when it is filed. The loss must be deducted on the State income tax return in the same tax year it is deducted for federal income tax purposes.

Last modified on: 10/31/07 02:38:54 PM .