H.R. 2145

Disaster Tax Relief Act of 2019

This bill allows various tax credits, tax deductions, and modifications to existing rules for individuals and businesses affected by certain federally declared disasters that began after January 1, 2018, and before the enactment of this bill.

With respect to individuals and businesses in the affected areas, the bill

• waives the 10% additional tax on certain early distributions from retirement plans,
• permits individuals to recontribute funds to retirement plans if the funds were distributed for a home purchase that was cancelled on account of a disaster,
• increases the limit and extends the repayment deadline for loans from retirement plans,
• allows an employee retention tax credit for employers affected by disasters,
• temporarily suspends the limitation on tax deductions for charitable contributions for relief efforts in disaster areas,
• modifies the rules for the deduction for personal casualty losses,
• allows taxpayers residing in disaster areas to use earned income from the immediately preceding year for the purpose of determining earned income for the earned income tax credit and the child tax credit, and
• automatically extends tax filing deadlines for taxpayers who have a principal residence or place of business located in a disaster area.

The bill also requires the Department of the Treasury to make payments to certain U.S. possessions to either compensate for revenue lost due to specified provisions in the bill or allow residents to benefit from the provisions.