H.R. 3954

Disaster Tax Relief Act of 2021

This bill sets forth tax relief provisions for taxpayers residing in a disaster zone. Specifically, the bill

• allows penalty-free qualified disaster distributions from tax-exempt retirement plans up to $100,000;
• allows recontributions of distributions for home purchases cancelled due to disasters;
• increases to $100,000 the limit on loans from retirement plans not treated as distributions;
• allows an employee retention tax credit for 40% of wages paid by employers affected by a disaster;
• expands eligibility for disaster-related personal casualty losses;
• allows exclusions from gross income, for income tax purposes, of amounts received from state-based catastrophe loss mitigation programs and emergency agricultural assistance;
• suspends the limitation on corporate charitable contributions;
• allows the Small Business Administration to award grants to accomodate extraordinary occurrences having a catastrophic impact on small business concerns; and
• allows a new tax credit for 30% of qualified wildfire mitigation expenditures.