(WASHINGTON D.C.) -- Iowans impacted by last year's derecho will qualify for tax relief. The bill by U.S. Senator Joni Ernst of Iowa allows for several benefits for individuals and businesses in presidentially declared disaster areas. The measure, co-sponsored by U.S. Senator Chuck Grassley, was signed into law as part of year-end legislation.
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 bipartisan bill:
- Removes penalties on early withdrawals from retirement accounts so folks can access their savings to help cover the cost of certain storm-related expenses
- Provides a tax credit for employee retention during business interruption
- Encourages charitable giving to affected areas, by suspending limits on deductions for certain contributions
- Creates special rules for qualified disaster-related personal casualty losses
- Allows 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