President Trump on September 29, 2017 signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (HR 3823).  Since the income tax filing deadline is just around the corner, we thought it would be a good time to remind everyone of the benefits provided in the legislation.  The filing deadline is April 17 this year because April 15 falls on a Sunday, and Emancipation Day, a legal holiday in Washington, D.C., will be observed April 16.

Among other things, the measure:

(1) eliminates the current requirement that uncompensated personal casualty losses exceed 10 percent of adjusted gross income to qualify for deduction;

(2) eliminates the current requirement that taxpayers itemize deductions to access this tax relief;

(3) provides an exception to the 10-percent early retirement plan withdrawal penalty for qualified hurricane relief distributions;

(4) allows for the re-contribution of retirement plan withdrawals for home purchases cancelled due to eligible disasters;

(5) provides flexibility for loans from retirement plans for qualified hurricane relief;

(6) temporarily suspends limitations on charitable contribution deductions associated with qualified hurricane relief made before December 31, 2017;

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

(8) allows taxpayers to use earned income from 2016 to determine the Earned Income Tax Credit and Child Tax Credit for the 2017 tax year.

Even if you have already filed your taxes, you can file an amended return if you neglected to take advantage of any of the benefits listed above.  Be sure to consult your tax preparer for more details and you can read about how the measure specifically impacts taxpayers affected by Hurricane Irma on the IRS website.

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