Claiming Hurricane Sandy personal property loss deductions

Federal income tax deduction

When filing your federal income tax return, you may deduct personal property losses that aren't covered by insurance or other reimbursements.  Claim the losses as an itemized deduction using federal Form 4684, Casualty and Theft.

If you're in a federally declared disaster area, you may claim disaster-related casualty losses on your federal income tax returns for either:

• the year the loss actually occurred; or
• the year immediately prior to the year the loss occurred.

Claiming the loss on an amended return for the prior year may result in an earlier refund, but waiting to claim the loss on the return for the year the loss occurred could result in greater tax savings, depending on other income factors.

See Federal Publication 547, Casualties, Disasters, and Thefts, for details about how to compute and claim the casualty loss deduction.

New York State income tax deduction

New York State follows the federal rules for casualty losses.  As a resident taxpayer, you may claim the loss on your New York personal income tax return as an itemized deduction.  You must use the same year you chose to claim the loss on your federal return.

The IRS has extended until October 15, 2013, the deadline for you to elect whether to deduct a loss related to Hurricane Sandy on your federal return for the year the loss actually occurred or on your return for the year immediately prior to the loss year.   See IRS Notice N-2013-21.  The extended date also applies for New York purposes. 

Note that a New York limitation on the amount of itemized deductions you can claim applies to taxpayers at certain income levels.