Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.
Wednesday, October 4, 2017
TAX RELIEF FOR HURRICANE VICTIMS
September 29, Trump signed into law H.R. 3823, the "Disaster Tax
Relief and Airport and Airway Extension Act of 2017".
disaster relief component of this Act makes temporary changes to the Tax Code
for individuals and businesses who were affected in –
Hurricane Harvey disaster area on or after August 23, 2017,
Hurricane Irma disaster area on or after September 4, 2017, and
Hurricane Maria disaster area on or after September 16, 2017.
eliminates the current requirement that the allowable deduction for net
casualty losses from the above disasters must be reduced by 10% of Adjusted
eliminates the current requirement that taxpayers must itemize deductions on
Schedule A to claim a casualty loss deduction for the above disasters (the
deduction will be treated as an additional Standard Deduction – and this additional
deduction will be allowed in calculating the Alternative Minimum Tax);
provides an exception to the 10-percent early retirement plan withdrawal
penalty for premature distributions related to hurricane relief for the above
allows for the re-contribution of retirement plan withdrawals for home purchases
cancelled due to the above disasters;
provides flexibility for loans from retirement plans for qualified hurricane
relief for the above disasters;
temporarily suspends the 20%, 30% and 50% limitations on charitable
contribution deductions to qualified organizations associated with hurricane
relief for the above disasters made before December 31, 2017;
creates an “Employee Retention Credit” of 40% of wages (up to $6,000 per
employee) paid for employers that conducted an active trade or business in the
above listed disaster areas on the date of the disaster and the active trade or
business for which was rendered inoperable for some period of time following
the disaster; and
allows taxpayers to use earned income from 2016 to calculate the 2017 Earned
Income Tax Credit and Child Tax Credit.