PL 115-63 - Disaster Tax Relief for Hurricanes

Radar for Hurricane Harvey - National Weather Service

Sometimes after major disasters, Congress enacts additional relief. This occurred in late September for the hurricanes. The relief does not apply for the California wildfires. We'll have to wait and see if similar legislation is enacted for it.

P.L. 115-63 (9/29/17) Disaster Tax Relief and Airport and Airway Extension Act of 2017 (H.R. 3823), was enacted. Key tax provisions provide relief for victims of Hurricanes Harvey, Irma and Maria. In addition, certain aviation taxes expiring in 2017 were extended a few months (into 2018). Disaster relief provisions include:

1. Relief of penalty for early withdrawal of retirement funds under 72(t) waived for qualified hurricane distributions. Generally, any amount required to be included in gross income can be spread over three years.
2. The loan limit from a qualified employer plan is increased from $50,000 to $100,000. The repayment date for outstanding loans may qualify for delayed repayment.
3. Employee retention credits for affected employees and employers are created under §38. The credit is 40% of qualified wages applied to the first $6,000 of wages.
4. Charitable contribution limits are relaxed for qualified contributions in cash made from August 23, 2017 through the end of the year for both individuals and corporations. A contemporaneous written acknowledgement is required that notes that the donation will be used for relief efforts. Also, an election by the donor is required.
5. The 10% of AGI casualty loss limit does not apply and a taxpayer need not itemize to claim the loss. The $100 per casualty limit is increased to $500 for the disaster loss.
6. The EITC and child tax credit calculations can use earned income for the preceding year if greater than earned income for 2017.

Also see my earlier post which I've been updating on disaster relief - here.