WASHINGTON – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Sen. Joni Ernst’s (R-Iowa) Disaster Tax Relief Act of 2020 was recently signed into law as part of the year-end legislative package. This bipartisan legislation will provide tax relief to the individuals, families and small businesses in presidentially declared disaster areas, including those impacted by the August derecho that devastated parts of the state.
“Iowa families, farmers and businesses have faced extremely difficult circumstances throughout this pandemic. On top of that, many of them are still facing the aftermath of the historic derecho. This bipartisan legislation will allow Iowans to keep more of their own hard-earned money to get back on their feet, rebuild and continue moving forward,” Grassley said.
As included in the Consolidated Appropriations Act, 2021, 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 January 1, 2020, through the period ending 60 days after the date of enactment.
The bipartisan 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.
The Iowa senators introduced
this legislation in September after touring
the severe damage following the historic derecho around the state and meeting with local leaders and nonprofits.