[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 140 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 140
To provide tax relief for damages relating to Hurricanes Helene and
Milton.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 3, 2025
Mr. Buchanan introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To provide tax relief for damages relating to Hurricanes Helene and
Milton.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Hurricane Helene
and Milton Tax Relief Act of 2025''.
(b) Table of Contents.--
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Earned income credit determined based on preceding taxable year
income with respect to qualified hurricane
disaster areas.
Sec. 4. Increased limitation on charitable contributions for qualified
hurricane disaster relief; certain
contributions paid before April 15, 2025,
treated as paid in 2024.
Sec. 5. Special hurricane disaster-related rules for use of retirement
funds.
SEC. 2. DEFINITIONS.
For purposes of this Act--
(a) Eligible Individual.--The term ``eligible individual'' means
an individual whose principal place of abode at any time during the
incident period is located in the qualified hurricane disaster area and
who has sustained an economic loss by reason of Hurricane Helene or
Hurricane Milton.
(b) Qualified Hurricane Disaster Area.--The term ``qualified
hurricane disaster area'' means an area with respect to which a major
disaster has been declared by the President (before the date of the
enactment of this Act) under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of Hurricane
Helene or Hurricane Milton.
(c) Incident Period.--The term ``incident period'' means the period
beginning on September 28, 2024, and ending on November 2, 2024.
SEC. 3. EARNED INCOME CREDIT DETERMINED BASED ON PRECEDING TAXABLE YEAR
INCOME WITH RESPECT TO QUALIFIED HURRICANE DISASTER
AREAS.
(a) In General.--In the case of an eligible individual, if the
earned income of the taxpayer for the applicable taxable year is less
than the earned income of the taxpayer for the preceding taxable year,
the credit allowed under section 32 of the Internal Revenue Code of
1986 for the applicable taxable year may, at the election of the
taxpayer, be determined by substituting--
(1) such earned income for the preceding taxable year, for
(2) such earned income for the applicable taxable year.
(b) Applicable Tax Year.--For purposes of this section, the term
``applicable taxable year'' means any taxable year which includes any
portion of the incident period.
(c) Earned Income.--For purposes of this section, the term ``earned
income'' has the meaning given such term under section 32(c) of such
Code.
(d) Special Rules.--
(1) Application to joint returns.--For purposes of
subsection (a), in the case of a joint return for an applicable
taxable year--
(A) such subsection shall apply if either spouse is
an eligible individual, and
(B) the earned income of the taxpayer for the
preceding taxable year shall be the sum of the earned
income of each spouse for such preceding taxable year.
(2) Errors treated as mathematical error.--For purposes of
section 6213 of such Code, an incorrect use on a return of
earned income pursuant to subsection (a) shall be treated as a
mathematical or clerical error.
(3) No effect on determination of gross income, etc.--
Except as otherwise provided in this section, such Code shall
be applied without regard to any substitution under subsection
(a).
(4) Limitation to single taxable year.--No taxpayer may
make an election under subsection (a) if such taxpayer (or in
the case of a joint return, the taxpayer's spouse) made such an
election for any preceding taxable year.
SEC. 4. INCREASED LIMITATION ON CHARITABLE CONTRIBUTIONS FOR QUALIFIED
HURRICANE DISASTER RELIEF; CERTAIN CONTRIBUTIONS PAID
BEFORE APRIL 15, 2025, TREATED AS PAID IN 2024.
(a) Qualified Hurricane Disaster Contributions.--
(1) Individuals.--In the case of any qualified hurricane
disaster contribution, notwithstanding section 170(b) of such
Code, the total amount of such contributions which may be taken
into account under section 170(a) of such Code shall not exceed
the excess of--
(A) the taxpayer's contribution base, over
(B) the amount of all other charitable
contributions allowable under section 170(b)(1) of such
Code.
(2) Carryover.--
(A) In general.--If the aggregate amount of
contributions described in paragraph (1) exceeds the
limitation under such paragraph, such excess shall be
treated (in a manner consistent with the rules of
subsection 170(d)(1) of such Code) as a charitable
contribution to which paragraph (1) applies in each of
the 5 succeeding years in order of time.
(B) Coordination with deduction for charitable
contributions.--For purposes of applying this paragraph
and sections 170(b)(1)(G) and 170(d)(1) of such Code,
contributions described in paragraph (1) shall not be
treated as described in subparagraph (A) or (G) of
section 170(b)(1) of such Code and such subparagraphs
shall be applied without regard to such contributions.
(3) Application of election to partnerships and s
corporations.--In the case of a partnership or S corporation,
the election under subsection (e)(3)(A)(iii) shall be made
separately by each partner or shareholder.
(b) Corporations.--
(1) In general.--In the case of any qualified hurricane
disaster contribution, notwithstanding section 170(b) of such
Code, the total amount of such contributions which may be taken
into account under section 170(a) of such Code shall not exceed
the excess of--
(A) 20 percent of the taxpayer's taxable income,
over
(B) the amount of charitable contributions allowed
under section 170(b)(2)(A) of such Code.
(2) Carryover.--If the aggregate amount of contributions
described in paragraph (1) exceeds the limitation under such
paragraph, such excess shall be treated (in a manner consistent
with the rules of section 170(d)(1) of such Code) as a
charitable contribution to which paragraph (1) applies in each
of the 5 succeeding years in order of time.
(3) Coordination with deduction for charitable
contributions.--For purposes of applying this paragraph and
sections 170(b)(2) of such Code, contributions described in
paragraph (1) shall not be treated as described in subparagraph
(A), (B), or (C) of section 170(b)(2) of such Code and such
subparagraphs shall be applied without regard to such
contributions.
(c) Deduction Allowed Above the Line.--In the case of an
individual--
(1) the standard deduction otherwise determined under
section 63 of such Code shall be increased by so much of the
deduction allowed under section 170 of such Code as would not
be so allowed if determined without regard to this section, and
(2) section 56(b)(1)(D) of such Code shall not apply to so
much of the standard deduction as is attributable to the
increase under paragraph (1).
(d) Contributions Treated as Made in Prior Year.--For purposes of
this section, a taxpayer may treat any qualified hurricane disaster
contribution which is paid after December 31, 2024, and on or before
April 15, 2025, as if such contribution was made on December 31, 2024,
and not in 2025.
(e) Definitions.--For purposes of this section--
(1) Charitable contribution.--The term ``charitable
contribution'' has the meaning given such term in section
170(c) of such Code.
(2) Contribution base.--The term ``contribution base'' has
the meaning given such term in section 170(b)(1)(H) of such
Code.
(3) Qualified hurricane disaster contribution.--
(A) In general.--The term ``qualified hurricane
disaster contribution'' means any charitable
contribution if--
(i) such contribution--
(I) is paid on or after the first
day of the incident period and before
December 31, 2025, in cash to an
organization described in section
170(b)(1)(A) of such Code, and
(II) is made for relief efforts in
a qualified hurricane disaster area
related to Hurricane Helene or
Hurricane Milton,
(ii) the taxpayer obtains from such
organization contemporaneous written
acknowledgment (within the meaning of section
170(f)(8) of such Code) that such contribution
was used (or is to be used) for relief efforts
in a qualified hurricane disaster area related
to Hurricane Helene or Hurricane Milton, and
(iii) the taxpayer has elected the
application of this section with respect to
such contribution.
(B) Exception.--A qualified hurricane disaster
contribution shall not include a contribution by a
donor if the contribution is--
(i) to an organization described in section
509(a)(3) of such Code, or
(ii) for establishment of a new, or
maintenance of an existing, donor advised fund
(as defined in section 4966(d)(2) of such
Code).
SEC. 5. SPECIAL HURRICANE DISASTER-RELATED RULES FOR USE OF RETIREMENT
FUNDS.
(a) Tax-Favored Withdrawals From Retirement Plans.--
(1) In general.--Section 72(t) of the Internal Revenue Code
of 1986 shall not apply to any qualified hurricane disaster
distribution.
(2) Aggregate dollar limitation.--
(A) In general.--For purposes of this subsection,
the aggregate amount of distributions received by an
individual which may be treated as qualified hurricane
disaster distributions for any taxable year shall not
exceed the excess (if any) of--
(i) $100,000, over
(ii) the aggregate amounts treated as
qualified hurricane disaster distributions
received by such individual for all prior
taxable years.
(B) Treatment of plan distributions.--If a
distribution to an individual would (without regard to
subparagraph (A)) be a qualified hurricane disaster
distribution, a plan shall not be treated as violating
any requirement of such Code merely because the plan
treats such distribution as a qualified hurricane
disaster distribution, unless the aggregate amount of
such distributions from all plans maintained by the
employer (and any member of any controlled group which
includes the employer) to such individual exceeds
$100,000.
(C) Controlled group.--For purposes of subparagraph
(B), the term ``controlled group'' means any group
treated as a single employer under subsection (b), (c),
(m), or (o) of section 414 of such Code.
(3) Amount distributed may be repaid.--
(A) In general.--Any individual who receives a
qualified hurricane disaster distribution may, at any
time during the 3-year period beginning on the day
after the date on which such distribution was received,
make 1 or more contributions in an aggregate amount not
to exceed the amount of such distribution to an
eligible retirement plan of which such individual is a
beneficiary and to which a rollover contribution of
such distribution could be made under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of such
Code, as the case may be.
(B) Treatment of repayments of distributions from
eligible retirement plans other than iras.--For
purposes of such Code, if a contribution is made
pursuant to subparagraph (A) with respect to a
qualified hurricane disaster distribution from an
eligible retirement plan other than an individual
retirement plan, then the taxpayer shall, to the extent
of the amount of the contribution, be treated as having
received the qualified hurricane disaster distribution
in an eligible rollover distribution (as defined in
section 402(c)(4) of such Code) and as having
transferred the amount to the eligible retirement plan
in a direct trustee to trustee transfer within 60 days
of the distribution.
(C) Treatment of repayments of distributions from
iras.--For purposes of such Code, if a contribution is
made pursuant to subparagraph (A) with respect to a
qualified hurricane disaster distribution from an
individual retirement plan (as defined by section
7701(a)(37) of such Code), then, to the extent of the
amount of the contribution, the qualified hurricane
disaster distribution shall be treated as a
distribution described in section 408(d)(3) of such
Code and as having been transferred to the eligible
retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution.
(4) Definitions.--For purposes of this subsection--
(A) Qualified hurricane disaster distribution.--
Except as provided in paragraph (2), the term
``qualified hurricane disaster distribution'' means any
distribution from an eligible retirement plan made--
(i) on or after the first day of the
incident period and before December 31, 2025,
and
(ii) to an eligible individual.
(B) Eligible retirement plan.--The term ``eligible
retirement plan'' shall have the meaning given such
term by section 402(c)(8)(B) of such Code.
(5) Income inclusion spread over 3-year period.--
(A) In general.--In the case of any qualified
hurricane disaster distribution, unless the taxpayer
elects not to have this paragraph apply for any taxable
year, any amount required to be included in gross
income for such taxable year shall be so included
ratably over the 3-taxable-year period beginning with
such taxable year.
(B) Special rule.--For purposes of subparagraph
(A), rules similar to the rules of section
408A(d)(3)(E) of such Code shall apply.
(6) Special rules.--
(A) Exemption of distributions from trustee to
trustee transfer and withholding rules.--For purposes
of sections 401(a)(31), 402(f), and 3405 of such Code,
qualified hurricane disaster distributions shall not be
treated as eligible rollover distributions.
(B) Qualified hurricane disaster distributions
treated as meeting plan distribution requirements.--For
purposes of such Code, a qualified hurricane disaster
distribution shall be treated as meeting the
requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such
Code and section 8433(h)(1) of title 5, United States
Code, and, in the case of a money purchase pension
plan, a qualified hurricane disaster distribution which
is an in-service withdrawal shall be treated as meeting
the distribution rules of section 401(a) of such Code.
(b) Recontributions of Withdrawals for Home Purchases.--
(1) Recontributions.--
(A) In general.--Any individual who received a
qualified distribution may, during the applicable
period, make 1 or more contributions in an aggregate
amount not to exceed the amount of such qualified
distribution to an eligible retirement plan (as defined
in section 402(c)(8)(B) of such Code) of which such
individual is a beneficiary and to which a rollover
contribution of such distribution could be made under
section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of
such Code, as the case may be.
(B) Treatment of repayments.--Rules similar to the
rules of subparagraphs (B) and (C) of subsection (a)(3)
shall apply for purposes of this subsection.
(2) Qualified distribution.--For purposes of this
subsection, the term ``qualified distribution'' means any
distribution--
(A) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(i)(V), 403(b)(11)(B), or 72(t)(2)(F), of
such Code,
(B) which was to be used to purchase or construct a
principal residence in a qualified hurricane disaster
area, but which was not so used on account of Hurricane
Helene or Hurricane Milton, and
(C) which was received during the period beginning
on the date which is 180 days before the first day of
the incident period and ending on the date which is 30
days after the last day of such incident period.
(3) Applicable period.--For purposes of this subsection,
the term ``applicable period'' means, in the case of a
principal residence in a qualified hurricane disaster area, the
period beginning on the first day of the incident period and
ending on December 31, 2025.
(c) Loans From Qualified Plans.--
(1) Increase in limit on loans not treated as
distributions.--In the case of any loan from a qualified
employer plan (as defined under section 72(p)(4) of such Code)
to an eligible individual made during the period beginning on
the date of the enactment of this Act and ending on June 30,
2025--
(A) section 72(p)(2)(A)(i) of such Code shall be
applied by substituting `` $100,000'' for `` $50,000'',
and
(B) clause (ii) of such section shall be applied by
substituting ``the present value of the nonforfeitable
accrued benefit of the employee under the plan'' for
``one-half of the present value of the nonforfeitable
accrued benefit of the employee under the plan''.
(2) Delay of repayment.--In the case of an eligible
individual with an outstanding loan (on or after the first day
of the incident period) from a qualified employer plan (as
defined in section 72(p)(4) of such Code)--
(A) if the due date pursuant to subparagraph (B) or
(C) of section 72(p)(2) of such Code for any repayment
with respect to such loan occurs during the period
beginning on the first day of the incident period and
ending on the date which is 180 days after the last day
of such incident period, such due date shall be delayed
for 1 year (or, if later, until December 31, 2025),
(B) any subsequent repayments with respect to any
such loan shall be appropriately adjusted to reflect
the delay in the due date under subparagraph (A) and
any interest accruing during such delay, and
(C) in determining the 5-year period and the term
of a loan under subparagraph (B) or (C) of section
72(p)(2) of such Code, the period described in
subparagraph (A) of this paragraph shall be
disregarded.
(d) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any
amendment to any plan or annuity contract, such plan or
contract shall be treated as being operated in accordance with
the terms of the plan during the period described in paragraph
(2)(B)(i).
(2) Amendments to which subsection applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to any provision of this
section, or pursuant to any regulation issued
by the Secretary or the Secretary of Labor
under any provision of this section, and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2025, or such later date as the Secretary may
prescribe.
In the case of a governmental plan (as defined in
section 414(d) of such Code), clause (ii) shall be
applied by substituting the date which is 2 years after
the date otherwise applied under clause (ii).
(B) Conditions.--This subsection shall not apply to
any amendment unless--
(i) during the period--
(I) beginning on the date that this
section or the regulation described in
subparagraph (A)(i) takes effect (or in
the case of a plan or contract
amendment not required by this section
or such regulation, the effective date
specified by the plan), and
(II) ending on the date described
in subparagraph (A)(ii) (or, if
earlier, the date the plan or contract
amendment is adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect, and
(ii) such plan or contract amendment
applies retroactively for such period.
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