Senators offer disaster tax relief bill

Senators offer disaster tax relief bill
© Bonnie Cash

A bipartisan group of senators on Wednesday offered legislation to provide tax relief to individuals and businesses affected by natural disasters, such as August's derecho in the Midwest, the wildfires in western states, and Hurricanes Laura and Isaias.

The bill was introduced by Iowa Sens. Joni ErnstJoni Kay ErnstTillis appears to reinforce question about COVID-19 death toll The power of incumbency: How Trump is using the Oval Office to win reelection Poll: Trump opens up 6-point lead over Biden in Iowa MORE (R) and Chuck GrassleyCharles (Chuck) Ernest GrassleyGOP lawmakers distance themselves from Trump comments on transfer of power The Hill's 12:30 Report: Ginsburg lies in repose Top GOP senators say Hunter Biden's work 'cast a shadow' over Obama Ukraine policy MORE (R), California Sen. Dianne FeinsteinDianne Emiel FeinsteinTrump faces tricky choice on Supreme Court pick The Hill's Morning Report - Sponsored by Facebook - Trump previews SCOTUS nominee as 'totally brilliant' Abortion stirs GOP tensions in Supreme Court fight MORE (D) and Louisiana Sens. Bill CassidyWilliam (Bill) Morgan CassidyCoushatta tribe begins long road to recovery after Hurricane Laura Senators offer disaster tax relief bill Bottom line MORE (R) and John KennedyJohn Neely KennedyMORE (R) — all of whom represent states impacted by disasters in recent months.

“This bipartisan legislation will allow Iowans to keep more of their own hard-earned money to get back on their feet and rebuild after the historic storm," Grassley said, referring to the derecho that pummeled parts of his home state. "Congress should pass this bill before the 2021 tax filing season begins so that families, farmers and businesses have enough time to use this relief for a swift recovery.”

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The bill includes several tax provisions that would apply to individuals and businesses in regions that are designated as presidentially declared disaster areas from July 1 through 60 days after the bill's enactment.

It includes provisions to remove penalties on early withdrawal from retirement accounts, suspend limits on deductions for certain charitable contributions and provide an employee retention tax credit. It would also allow low-income individuals to use their previous year's income when claiming certain tax credits, so that they don't receive smaller credits for 2020 if their incomes declined as a result of the disaster.

"We should provide our families, communities, and businesses more relief by getting rid of burdensome taxes and penalties, and that’s what this commonsense, bipartisan bill would do,” Ernst said.

Congress has enacted similar disaster tax relief provisions in the past. An omnibus spending package enacted in December included provisions to provide tax relief for individuals and businesses affected by disasters that occurred in 2018 and 2019.