Citizens Insurance Tax Credit – Individuals

Click here for Form 540-INS – Request for Refund of Louisiana Citizens Property Insurance Corporation Assessment

The Citizens Insurance Tax Credit is available for LA Citizens assessments paid on or before December 31, 2019.

How do I determine the amount of the credit?

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):

• Louisiana Citizens FAIR Plan Regular Assessment Recoupment Surcharge

• Louisiana Citizens Coastal Plan Regular Assessment Recoupment Surcharge

• Louisiana Citizens FAIR Plan Emergency Assessment

• Louisiana Citizens Market Equalization Charge

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 assessment paid. The credit is a percentage of the assessment paid. Starting with
assessments paid on or after January 1, 2016, and before January 1, 2020, the credit is equal to 25 percent of the assessment
paid.

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.

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When can the credit be claimed?

The credit may only be claimed in the year paid regardless of the due date of your
premium. For example, Citizens assessments paid on January 1, 2016 thru December 31,
2016 may be claimed on the 2016 income tax return which is due in 2017. 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.

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What documents are required to be filed and retained?

Paper returns:

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.

Returns filed electronically:

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.

Tax returns prepared by paid preparer:

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.

Substitute documents:

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.

Retention of documentation of proof of payment:

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.

Individuals who are required to file a Louisiana income tax return

The credit for assessments paid on or after January 1, 2007, and before January 1, 2020 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.

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.

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Individuals who are not required to file a Louisiana income tax return

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
.

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Individuals who filed a Louisiana income tax return and have not claimed the credit

Taxpayers who already filed a Louisiana income tax and failed to claim the credit,
may claim the credit by filing a “Request for Refund of Louisiana Citizens Property
Insurance Corporation Assessment”,

Form R-540INS
,
instead of amending their tax return. The credit must be
claimed on the appropriate form for the year in which the assessment was paid. A
separate return must be filed for each year in which you paid an assessment on your
homeowner’s policy.

Citizens assessments paid in 2008 can be claimed as a credit on a
2008 Form R-540INS or by amending the 2008 income tax return. Citizens assessments
paid in 2009 can be claimed as a credit on a
2009 Form R-540INS or by amending the 2009 income tax return and so on.

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. For individuals who had
more than one property for which the LA Citizens assessments were paid,

Form R-INS
Supplement must also be completed and documentation for each property listed must
be attached to the form.

NOTE: The credit may not be claimed on both the income tax return and the Request
for Refund form. If you claimed the credit on the Louisiana income tax return, the
credit may not be claimed on Form R-540INS. If you filed Form R-540INS to claim
the credit, the credit may not be claimed on the Louisiana income tax return.

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