Tax Legislation Update
If you suffered a casualty loss during one of the recent hurricanes, the tax act signed by the President on Friday, September 29, 2017, provides the following relief:
Any casualty loss, not just the portion in excess of 10% of your adjusted gross income, qualifies as a deduction. And you do not have to itemize deductions in order to take advantage of this tax relief.
In addition, the Disaster Tax Relief and Airport and Airway Extension Act of 2017, will:
- Provide an exception to the 10% early retirement plan withdrawal penalty for qualified hurricane relief distributions.
- Allow for the re-contribution of retirement plan withdrawals for home purchases cancelled due to eligible disasters.
- Provide flexibility for loans from retirement plans for qualified hurricane relief.
- Temporarily suspend limitations on charitable contribution deductions. associated with qualified hurricane relief made before December 31st, 2017.
- Provide a tax credit for 40% of wages (up to $6,000 per employee) paid by a disaster-affected employer to each employee from a core disaster area.
- Allow taxpayers to refer to earned income from the immediately preceding year for purposes of determining the Earned Income Tax Credit and Child Tax Credit for the 2017 tax year.