Sponsors (2)
Introduced January 3, 2025 by Vernon G. Buchanan · Last progress January 3, 2025
The bill provides targeted tax and retirement relief and boosts incentives for charitable hurricane relief to help affected households recover quickly, but it ties assistance to a narrow incident window and declarations, adds paperwork and tax complexity, and may encourage use of retirement assets that reduce long‑term savings.
Homeowners and renters who lived in presidentially declared disaster areas from Sept 28–Nov 2, 2024 become eligible for federal disaster relief for economic losses from Hurricanes Helene or Milton, giving directly targeted financial assistance to survivors.
Taxpayers affected by the hurricanes can access expanded retirement-plan relief — penalty-free distributions up to $100,000, the ability to recontribute within 3 years, income spreading over three years, higher temporary plan-loan caps and delayed repayments — improving near-term liquidity for recovery and preserving options to restore retirement savings.
Low-income taxpayers (and some joint filers) in qualified hurricane areas may elect to use prior-year earned income for the EITC calculation, potentially increasing refundable credits or reducing tax owed in the disaster year.
Homeowners, renters, and low-income households who were harmed by the storms but lived outside the narrow Sept 28–Nov 2, 2024 incident window or whose area was not covered by a Presidential major disaster declaration are excluded from eligibility, leaving many storm‑impacted people without federal relief.
Applicants lacking documentary proof of residency or economic loss during the specified window — particularly low‑income and displaced people — may face delays or denial of benefits because the law ties eligibility to documented residency and loss.
Limits and complexity in the EITC change — including one‑time use of the prior‑year substitution and risk of misapplication — can reduce available relief for some taxpayers and create confusion or delayed refunds.
Based on analysis of 8 sections of legislative text.
Temporary tax relief for Hurricane Helene and Milton: prior-year earned income for EIC, enhanced cash charitable deductions, and penalty-free retirement withdrawals up to $100,000.
Provides temporary tax relief for people and charities affected by Hurricanes Helene and Milton. It lets eligible residents of declared disaster areas use the prior year’s earned income when that produces a larger earned income tax credit (EIC), creates an enhanced temporary deduction for cash gifts to public charities, and permits penalty‑free withdrawals from retirement plans (up to $100,000) with special rollover and income‑spreading rules. These changes apply to taxable years that include the incident period (Sept 28–Nov 2, 2024) and include carryforward, election, and documentation rules; some donation and retirement provisions extend through Dec 31, 2025 (with certain donations made by Apr 15, 2025 treated as made on Dec 31, 2024).