The U.S. House and Senate both approved legislation on Sept. 28 to expand access by victims of Hurricanes Harvey, Irma and Maria to their 401(k) and similar plans without incurring IRS penalties and taxes, clearing the measure for President Trump's signature.
The Disaster Tax Relief and Airway Extension Act of 2017 (H.R. 3823) was first approved in the House by a vote of 264-155, with 43 Democrats voting in favor of the legislation. The Senate then approved the legislation by unanimous consent after approving an amendment to strike the provisions relating to development of a private flood insurance market, which the House also subsequently approved.
As we previously reported, the retirement relief provisions are consistent with the recommendations by the American Retirement Association to provide hurricane victims and their families relief from penalties and taxes, mirroring the relief previously provided by Congress to victims of Hurricanes Katrina, Wilma and Rita in 2005.
The bill also includes tax provisions relating to employment-related tax credits, deductions for charitable contributions, deductions for personal casualty losses, and income requirements for the earned income tax credit and the child tax credit.
Additional hurricane-related tax provisions are expected to be advanced separately over the coming months, once the extent of the damage and the needs of affected communities can be more fully assessed.
