Late last month, President Trump signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 into law after Congress approved the bill.

The White House stated the bill would “provide targeted tax relief for taxpayers impacted by Hurricanes Harvey, Irma and Maria. In addition to supporting these tax relief measures, the administration will submit further requests to the Congress for supplemental funding in the near future, and looks forward to working with Congress to enact these recovery measures into law.”

Among other things, the bill will help by:

  • Eliminating the current law requirements in the disaster areas that uncompensated personal casualty losses exceed 10 percent of adjusted gross income to qualify for deduction
  • Eliminating the current law requirement that taxpayers itemize deductions to access this tax relief
  • Providing an exception to the 10-percent early retirement plan withdrawal penalty for qualified hurricane relief distributions
  • Allowing for the re-contribution of retirement plan withdrawals for home purchases cancelled due to eligible disasters
  • Giving flexibility for loans from retirement plans for qualified hurricane relief
  • Providing temporarily suspend limitations on charitable contribution deductions associated with qualified hurricane relief made before Dec. 31, 2017
  • Giving a tax credit for 40 percent of wages (up to $6,000 per employee) paid by a disaster-affected employer to each employee from a core disaster area
  • Allowing taxpayers to refer to earned income from the immediately preceding year for purposes of determining the Earned Income Tax Credit and Child Tax Credit for the 2017 tax year

If you or your business has been impacted by these recent storms and want to understand better how this new act can be used to your advantage, contact Doeren Mayhew’s tax advisors today.