Washington – Today Chairman of the House Ways and Means Subcommittee on Select Revenue Measures Mike Thompson (CA-05), along with Rep. Earl Blumenauer (OR-03) and Rep. Abby Finkenauer (IA-01) announced the introduction of the Disaster Tax Relief Act of 2020. The bill would extend tax relief to survivors of natural disasters, other than the Coronavirus pandemic, such as the recent LNU Lightning Complex fires that hit Thompson’s district.
“Our district is in the middle of a devastating fire, destroying homes and businesses, and leaving communities hit with another round of anxiety and grief about when and if they can go home. Disaster survivors deserve every piece of Federal assistance we can deliver for them, including an extension of tax credits that will help them rebuild and recover,” said Thompson. “This bill will help people who lost their homes, individuals worried about losing income, and businesses that were forced to close or that burned down. We need this bill passed right away and I will continue working to bring back every Federal dollar and resource to help our district recover.”
“Oregonians have suffered unprecedented destruction from the wildfires, and this disaster is far from over,” said Blumenauer, a senior member of the House Ways and Means Committee. “With one million acres burned and more than 1,000 homes destroyed, Congress must enact comprehensive tax relief to ensure Oregon families and businesses get the necessary aid to overcome this crisis and achieve a strong recovery.”
“As Iowa’s First Congressional District continues recovering from August’s derecho, we need to do all we can to help,” Finkenauer said. “That’s why we introduced the Disaster RELIEF Act last week to help families whose lives were turned upside down and help employers take care of employees during this difficult time. I want to thank Chairman Thompson and Chairman Blumenauer for working with us to include our critical legislation in this important comprehensive disaster tax relief package.”
Natural disasters continue to be a sadly unavoidable part of daily life for so many Americans – since the expiration of the 2019 disaster tax relief package there have been 37 major natural disaster declarations. This Disaster Tax Relief Act of 2020 extends tax relief provisions for disaster survivors, including the following provisions:
- Special disaster-related rules for use of retirement funds. This provision provides an exception to the 10 percent early retirement plan withdrawal penalty for certain qualified disaster relief distributions (not to exceed $100,000 in qualified distributions cumulatively). It allows for the re-contribution of retirement plan withdrawals for home purchases cancelled due to eligible disasters and provides flexibility for loans from retirement plans for certain qualified disaster relief.
- Employee retention credit for employers affected by qualified disasters. This provision provides a tax credit for 40 percent of wages (up to $6,000 per employee) paid by certain disaster-affected employers to employees from a core disaster area. The credit applies to wages paid without regard to whether services associated with those wages were performed.
- Special rules for qualified disaster-related personal casualty losses. This provision eliminates the current law requirements that personal casualty losses must exceed 10 percent of adjusted gross income to qualify for deduction with respect to uncompensated losses arising in certain disaster areas. The provision would also eliminate the current law requirement that taxpayers must itemize deductions to access this tax relief.
- Special Rule for Determining Earned Income for Taxpayers whose 2020 income was disaster-impacted. This provision allows taxpayers in disaster areas to refer to earned income from the immediately preceding year for purposes of determining the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) in tax year 2020.
- Temporary suspension of limitations on charitable contributions. This provision temporarily suspends limitations on the deduction for charitable contributions from corporations associated with certain qualified disaster relief. The CARES Act already provided this relief for individuals.
You can click here to read the full text of the bill.
Congressman Mike Thompson is proud to represent California’s 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma Counties. He is a senior member of the House Committee on Ways and Means where he chairs the Subcommittee on Select Revenue Measures. Rep. Thompson is Chairman of the House Gun Violence Prevention Task Force. He is also Co-Chair of the bipartisan, bicameral Congressional Wine Caucus and a member of the fiscally-conservative Blue Dog Coalition.
Go to Source