Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Sen. Joni Ernst (R-Iowa) continued their efforts to provide support for Iowans impacted by the August derecho that devastated parts of the state. On Wednesday, the Iowa senators introduced a bipartisan bill with Sens. Dianne Feinstein (D-Calif.), Bill Cassidy (R-La.) and John Kennedy (R-La.) to provide tax relief to the individuals, families and small businesses in Presidentially declared disaster areas, including those impacted by the Iowa derecho, the wildfires in California and Oregon and Hurricanes Laura and Isaias.
“The derecho devastated Iowa’s economy just as it was beginning to recover from the pandemic. Iowans will undoubtedly overcome these hardships just as they always do, but they also deserve help.” Grassley said. “This bipartisan legislation will allow Iowans to keep more of their own hard-earned money to get back on their feet and rebuild after the historic storm. Congress should pass this bill before the 2021 tax filing season begins so that families, farmers and businesses have enough time to use this relief for a swift recovery.”
“As our nation continues to combat the coronavirus, Iowans in many of our counties have been faced with another challenge: recovering from the devastating derecho,” Ernst said. “I’ve been on the ground to meet with folks and assist where I can. While the administration has helped provide assistance, we should provide our families, communities, and businesses more relief by getting rid of burdensome taxes and penalties, and that’s what this commonsense, bipartisan bill would do.”
The Disaster Tax Relief Act of 2020 provides tax relief for individuals and businesses in Presidentially declared disaster areas for major disasters declared on or after July 1, 2020, through the period ending 60 days after the date of enactment.
The bill will:
- Remove penalties on early withdrawals from retirement accounts so folks can access their savings to help cover the cost of certain storm-related expenses.
- Provide a tax credit for employee retention during business interruption.
- Encourage charitable giving to affected areas, by suspending limits on deductions for certain contributions.
- Create special rules for qualified disaster-related personal casualty losses.
Allow low-income workers to use their previous year’s income to claim certain tax credits, ensuring that they do not lose access to the credits or receive a lower amount.