WASHINGTON D.C. (News release) - U.S. Senators Mark Pryor (D-AR), David Vitter (R-LA), and Charles Schumer (D-NY) today introduced the National Disaster Tax Relief Act, a bipartisan bill to provide much-needed tax relief to homeowners, businesses, and communities devastated by natural disasters.
“When natural disasters strike in our state, we all pitch in to help. But, sometimes additional help is needed to get our local communities up and running again,” Pryor said. “In conjunction with the disaster assistance funding we’ve already received this year, this bill will provide the extra assistance Arkansas needs to fully recover.”
The senators’ bill covers federally-declared disasters from 2012-2014 with a variety of assistance measures, including:
- Allows deductions for disaster cleanup expenses;
- Allows homeowners who lost their homes to qualify for financing under tax-exempt mortgage revenue bonds;
- Provides an additional bonus depreciation allowance for capital expenditures on commercial and residential rental properties in disaster areas;
- Waives the 10 percent penalty tax that would otherwise apply on an early withdrawal from a retirement plan for disaster victims;
- Allows an exemption of up to $2,000 for individuals who provided free housing for those displaced by a disaster;
- Permits disaster victims to use prior year’s income for purposes of calculating the earned income and child tax credits;
- Allows states to issue tax-exempt Disaster Recovery Bonds for the acquisition, construction, reconstruction, and renovation of residential rental property, commercial property, docks, wharves, mass commuting facilities, and public utility properties;
- Increases the Low-Income Housing Credit allocation for states damaged by a natural disaster, based on the population of qualified disaster areas within the state;
- Allows businesses to create a natural disaster fund, whereby they could set aside pretax dollars for natural disaster expenses, including insurance deductibles and coinsurance.
The full text of the bill can be found here.
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