Highlights of the Disaster Tax Relief

Highlights of the Disaster Tax Relief, Airport and Airway Extension Act of 2017 signed into law September 29, 2017:

  • Exceptions to the 10 percent early withdrawal penalties to qualified hurricane distributions from a qualified retirement or annuity plan, or an IRA up to $100,000
  • Exception to the inclusion rule for loans from a qualified plan if the loan is to an individual whose principal residence on the disaster date is located in the disaster area and who has sustained an economic loss by reason of the hurricanes
  • 100% deduction for charitable contributions related to hurricane relief made between August 23, 2017 through December 31, 2017
  • Employee retention credit allows eligible employers in the hurricane disaster area to receive a credit of 40% for qualified wages paid to employees while the business was inoperable. Note this credit does not apply to wages paid to employee-owners who own more than 50% of the business
  • Removes the requirement that personal casualty losses must exceed 10% of adjusted gross income (AGI) and increases the $100 per casualty limit to $500 for qualified disaster-related personal casualty losses and increases the standard deduction by the net disaster loss for taxpayers who do not itemize

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