U.S. Senator Joni Ernst (R-Iowa) successfully passed her bipartisan legislation with Senator Chuck Grassley (R-Iowa) to provide tax relief to the individuals, families, and small businesses in presidentially declared disaster areas, including those impacted by the Iowa derecho this summer. The bill was recently signed into law as part of the year-end package.
“As Iowans continue to recover from the devastating derecho that swept across our state in the summer, this new law will remove burdensome taxes and penalties and provide Iowa families, communities, and businesses more relief and support during these challenging times,” said Senator Joni Ernst.
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. Ernst worked with her fellow Iowan, Senator Chuck Grassley, on this measure.
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