Lancaster Law Blog : Lancaster PA Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Pennsylvania : Lancaster's Legal Link

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On September 15, Aaron Zeamer blogged about how the flooding in Lancaster County resulted in an extension of income tax deadlines. Additional tax relief as a result of flooding could be a reduction or elimination of property taxes. If you have suffered a "catastrophic loss" due to mine subsidence, fire, flood or other natural disaster which exceeds 50% of the market value of your real property prior to the loss, you have the right to appeal your real estate assessment to the County Assessment Board. The Board has the duty to reassess your property to reflect the loss in value from the date of the loss to the end of the taxable year. In addition, any property improvements made after the loss in the same tax year shall not be added to the assessment roll for the remainder of the tax year but shall be added for the following year. If this is done, tax authorities need to reflect the reduced assessment in the form of a credit for the succeeding tax year, or if the property owner applies, taxing authorities shall pay a refund. 

We recognize that the broad scope of the term "catastrophic loss" probably means that you may have bigger problems to face than getting your property taxes reduced, but in the event that you have suffered such a loss, this is another means of relief. 

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Making a will is something that occasionally crosses your mind, it's one of those things you think maybe you need but don't have the time or desire to make it a top priority. In addition, there are many things that can deter you from making a will such as lack of money or property, the unlikelihood that something catastrophic will happen to you or just simply procrastination. However, if you are a parent, one of the most important reasons you should have a will is to appoint a person to care for your child upon your death and the death of the other parent. The care of your child upon an unfortunate event such as death can happen to anyone regardless of the size of your estate. As a parent myself, I believe that one of the most important parts of a will is the section that appoints a guardian for anyone with minor children.

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The flooding in Lancaster County has inconsistently affected residents and businesses. Some residents have come away from the flood with absolutely no water at all in their basements and others have seen major damage from the flooding. My own neighborhood effectively turned into an island and getting home seemed impossible without a row boat. On September 13, 2011, Lancaster County was declared a Federal Disaster Area. This declaration can have significant impact, not only for those trying to get the water out of their basement or who have been severely affected by the flooding, but also for those who had tax deadlines this week.

Lancaster County's Website has some very helpful links and information for those who were affected by the recent flooding. On their website you can apply for federal assistance through FEMA, and other federal and state agencies, including unemployment assistance for individuals who find themselves unemployed due to the effects of Hurricane Irene or Tropical Storm Lee.

For other individuals and businesses in Lancaster County and surrounding counties including Adams, Bradford, Columbia, Cumberland, Dauphin, Lebanon, Luzerne, Lycoming, Montour, Northumberland, Perry, Schuylkill, Snyder, Sullivan, Susquehanna, Union, Wyoming, and York counties, the declaration making these areas a Federal Disaster Area has extended some important tax deadlines until October 31, 2011, even if you were not directly affected by the flooding. This extension includes corporations and other businesses that previously obtained an extension until September 15 to file their 2010 returns, and individuals and businesses that received a similar extension until October 17. It also includes the estimated tax payment for the third quarter, normally due September 15. You can go to the IRS website for more comprehensive information about the tax extension.

The Federal Disaster Area determination will also allow taxpayers in the affected areas to claim disaster-related casualty losses on their federal tax returns for either this tax year or last year. 

Please also remember that if you take advantage of the deadline extension, you may still receive a penalty notice from the IRS; you will need to contact the IRS using the number provided on the notice. You may need to confirm with the IRS that you are in an affected area and are entitled to the extension without penalty.

The PA Department of Revenue is providing a similar extension for the affected counties. Their website lists additional details regarding the special extension for affected PA taxpayers.

Countless Lancaster County residents were affected by these two storms. Regardless of the degree with which the storms may have impacted your home or business, be aware that you may be eligible for some benefits or assistance due to the Federal Disaster declaration.

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I came across an interesting question recently regarding the personal information required for the Small Business Administration's (SBA) loan application process. SBA has a business loan requirement checklist on their website and in the personal information section it states,

"Either as part of the loan application or as a separate document, you will probably be asked to provide some personal background information, including previous addresses, names used, criminal record, educational background, etc."

So let's say you have a criminal record and would like to apply for an SBA loan, are you immediately disqualified for a loan?

To answer this question you first need to understand the role of SBA in lending. SBA directly lends money to small business owners. SBA guarantees loans offered from participating lenders, such as banks and credit unions. The idea is that private lenders will be more likely to provide small business owners a loan if SBA is willing to stand behind a loan and pay if the borrower does not. Both SBA and the lender will have their own requirements to approve you.

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A few months ago I participated in a presentation in conjunction with Edward Jones called Key Life Decisions: Are You Prepared? I spoke about estate planning documents, such as wills, financial powers of attorney and living wills. One of the topics covered by another presenter was long-term care insurance. After the presentation it became clear to me that individuals might not be aware how long-term care can affect their estate planning wishes, and more importantly, cause their estate planning to not be carried out because assets are not left over after the cost of long-term care is paid.

Long-term care insurance policies were designed to deal with the significant costs associated with personal-care services, ranging from home care to skilled nursing facility care. Without long-term care insurance to pay for these services, most individuals spend all of their assets until they qualify for Medicaid. After Medicaid begins to cover the cost of long-term care, it generates a lien against the person's estate. Therefore, when someone passes away who was receiving long-term care paid for by Medicaid, the person's estate will receive a claim from the Department of Public Welfare equal to what was spent for the care. This means if there are any assets remaining in the estate, they will go to administering the estate and paying back the state for the care paid for by Medicaid. This is called Medicaid Estate Recovery.

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Last year, we wrote about how the American Recovery and Reinvestment Act (ARRA) included a COBRA subsidy that reduced the amount certain laid-off workers pay for health benefits by 65%. Without the subsidy, those workers would have been responsible for the entire cost of continuing to receive health benefits from their former employers. 

Because enrollment for the subsidy was closed at the end of May, 2010, and because the subsidy was available for up to fifteen months after termination of employment, September 1 marks the date on which the subsidy expires for the last remaining workers taking advantage of the subsidy. An exception would be where a worker was terminated before May 31, 2010 but did not receive COBRA benefits until a later date. For example, if an individual was involuntarily terminated on  May 31, 2010 and, due to the terms of a severance agreement, their COBRA coverage did not start until November 1, 2010, he or she would still be eligible for the full 15 months of subsidy through January 31, 2012

Because COBRA is typically expensive without the subsidy, it is expected that many unemployed workers will go without health insurance, especially in light of the Commonwealth's termination of the adultBasic program last May. Some unemployed workers may find some relief with the Health Coverage Tax Credit, but availability is limited because of strict eligibility requirements. Also, unemployed workers with children should look into the Pennsylvania CHIP program, which generally covers all uninsured children and teenagers in Pennsylvania.