What Is a Tornado Tax Credit?

Calculating the Oklahoma tornado tax credit took two steps. You needed to look up the amount of property tax paid the year of the tornado.

Oklahoma offered a tornado tax credit to homeowners whose primary residence was damaged in particularly damaging tornadoes. The tax credit offset the property tax paid on the damaged property.

Oklahoma Income Tax Code

Oklahoma Statute 68 Section 2357.29 provided a state income tax credit for home owners whose primary residence sustained damage or was destroyed in the Oct. 9, 2001, or May 8 or 9, 2003, tornadoes.

Credit Amount

The allowed amount was the difference between the ad valorem property tax paid and home improvements made the year before the tornado and the ad valorem property tax paid on the property and home improvements the year following the repairs or reconstruction caused by the tornado, based on the square footage of the home when the tornado occurred. The taxpayer could claim the credit for five consecutive years, but each year following the initial claim the amount was reduced to 80 percent of the previous year's credit.

Calculating the Credit

Calculating the credit required two steps. The property tax paid per square foot after repair was divided by the total property tax paid by the current square footage. The result was multiplied by the square footage of the home in 2000 or 2003 (depending on which tornado damaged the structure). The result was the amount of the credit.

Qualifying for the Credit

You could take this credit if your primary residence was damaged or destroyed in the 2001 or 2003 tornadoes. The home must have been your primary residence prior to and after the tornado and you and must have repaired or rebuilt it on the same property. The owner must have had a homestead exemption or be eligible for one for the year before and after the tornado. It also must have been within a federally declared disaster area. The primary residence had to be repaired or rebuilt and used as the primary residence no later than Dec. 31, 2003, for the 2001 tornado or Dec. 31, 2005, for the 2003 tornado. The credit was non-transferable.

Forms

The appropriate forms for the tax credit were available from the Oklahoma Tax Commission website. The form changed slightly for each tax year. The 2001 tornado tax credit required Form 509. The 2003 tornado tax credit required Form 575.

References

• Oklahoma Tax Commission: Archives--Past Years Income Tax Forms
• Oklahoma Tax Commission: May 8 or 9, 2003 Tornado Tax Credit
• Oklahoma Tax Commission: October 9, 2001 Tornado Tax Credit