Sponsors (2)
The bill gives targeted, near-term tax and relief flexibilities that help hurricane-affected households, charities, and employers access cash and preserve benefits, but it raises federal costs, adds administrative complexity, and can leave people outside narrow eligibility windows or weaken longer-term retirement security.
Homeowners, renters, and low-income people who lived in the declared disaster area between Sept 28–Nov 2, 2024 become eligible for targeted disaster relief and determinations are faster due to a clear incident window and alignment with Presidential disaster declarations.
Individuals and families in the affected area can access retirement-plan liquidity immediately—up to $100,000 penalty-free withdrawals, multi-year tax spreading, recontribution rollovers, higher plan loan limits, and delayed loan repayments—improving short-term cash flow after the hurricane.
Low-income taxpayers (including married couples filing jointly) in qualified hurricane areas can use higher prior-year earned income to preserve or increase their Earned Income Tax Credit for the disaster year, and certain incorrect substitutions will be treated as clerical/mathematical errors to reduce penalty risk.
Homeowners, renters, and low-income people who suffered hurricane losses but lived outside the narrowly defined geographic area or outside Sept 28–Nov 2, 2024 risk being excluded from relief, and the strict definitions may drive more administrative appeals and verification burdens.
Taxpayers who take penalty-free retirement withdrawals or larger plan loans face increased risk of reduced long-term retirement savings and weaker future retirement security.
Expanded EITC substitutions, larger charitable deductions, and retirement-tax relief increase federal revenue loss and could modestly raise the deficit or reduce funding available for other programs.
Based on analysis of 8 sections of legislative text.
Temporary disaster tax relief for residents of declared hurricane areas: EITC prior-year income option, expanded charitable deduction rules, and special retirement-distribution and rollover treatment through Dec 31, 2025.
Introduced January 3, 2025 by Vernon G. Buchanan · Last progress January 3, 2025
Provides temporary, targeted tax relief for people whose primary home was in a presidentially declared disaster area because of Hurricane Helene or Hurricane Milton during Sept 28–Nov 2, 2024. It allows eligible residents to use prior-year earned income to compute the Earned Income Credit, expands special charitable deduction rules for cash gifts to certain relief organizations, and creates tax-favored rules for early retirement-plan withdrawals and repayments (with a $100,000 cap and three-year rollover window) through the end of 2025. These changes are limited in time, include specific eligibility tests (principal residence in the declared area and an economic loss), and add filing elections and timing rules for individuals, joint filers, partners/shareholders, employers, and retirement plan administrators.