House Votes Down Disaster Tax Relief Bill

The House voted down the Disaster Tax Relief and Airport and Airway Extension Bill of 2017 on September 25 by a 245-to-171 vote, needing a two-thirds majority to pass. The bill, introduced by House Ways and Means Committee Chairman Kevin Brady, R-Tex., was released on September 22 (TAXDAY, 2017/09/25, C.2).

House Democratic Whip Steny Hoyer, D-Md., and Ways and Means Committee ranking member Richard Neal, D-Mass, among others, co-authored a September 25 “Dear Colleague” letter asking Democratic members to vote against the measure. “We write to ask that you join us in opposing it because the Majority is using this must-pass bill to push through unrelated Republican priorities—all while continuing to block Democrats from bringing the DREAM Act to the Floor,” the lawmakers wrote.

“It’s shameful that politics will trump meaningful relief for families suffering from these devastating hurricanes,” House Speaker Paul Ryan, R-Wis., said on September 25. House Minority Leader Nancy Pelosi, D-Calif, however, criticized the package’s tax provisions for not treating “all families recovering from natural disasters the same.”

The Disaster Tax Relief and Airport and Airway Extension Bill of 2017 would, among other things:

-eliminate the current law requirements in the disaster areas that uncompensated personal casualty losses exceed 10 percent of adjusted gross income to qualify for deduction;

-eliminate the current law requirement that taxpayers itemize deductions to access this tax relief;

-provide an exception to the 10-percent 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 31, 2017;

-provide a tax credit for 40 percent of wages (up to $6,000 per employee) paid by a disaster-affected employer to an employee from a core disaster area; and

-for 2017, 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.

By Jessica Jeane, Wolters Kluwer News Staff

JCT Estimated Revenue Effects of the Revenue Provisions Contained in Titles II and V of HR 3823, the Disaster Relief and Airport and Airway Extension Act of 2017, JCX-43-17

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