Disaster Survivors Tax Relief and Recovery Act
House Committee Reviews Bill to Expand Tax Relief, Retirement Access for 2025 Disaster Survivors
Legislative Progress
Key Points
- This bill, introduced by Ms. Chu, helps people living in areas hit by major disasters in 2025. It allows survivors who lost work to use their 2024 income levels to qualify for the Child Tax Credit and Earned Income Tax Credit, ensuring they don't lose these benefits because of a temporary drop in pay.
- Survivors can withdraw up to $100,000 from their retirement accounts, like a 401(k) or IRA, without paying the usual 10% early withdrawal penalty. They are also given three years to pay the income taxes on that money or put the money back into their retirement fund to avoid taxes entirely.
- The policy makes it easier to deduct property damage from taxes. It allows people to claim disaster-related losses as part of their standard deduction, meaning they can get a tax break for repairs and lost belongings even if they do not normally list every individual deduction on their tax forms.
- To help rebuild communities, the bill increases the amount of tax credits available for building low-income housing in disaster zones during 2026 and 2027. It also encourages more help by removing the normal limits on how much cash people and businesses can donate to disaster relief charities.
- The bill extends a special rule for wildfire victims, ensuring that any money they receive as compensation for losses or damages from certain wildfires remains tax-free through the year 2036.
Impact Analysis
Personal Impact
How this policy affects specific groups of people
State Impacts
Milestones
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
3 articlesCongresswoman Chu Renews Push for Eaton Fire Disaster Aid
Rep. Judy Chu introduced H.R. 6842, the Disaster Survivors Tax Relief and Recovery Act, to address critical gaps in the federal tax code for survivors of the Eaton Fire and other major disasters. The bill allows survivors to use 2024 income for tax credits and withdraw $100,000 from 401(k) plans.
On the Fire Anniversary, Chu and Friedman Push Congress to Deliver Lifesaving Relief
Rep. Chu introduced the Disaster Survivors Tax Relief and Recovery Act to codify tax provisions of Governor Newsom's disaster request. The act ensures wildfire settlements are not taxed and allows survivors to claim disaster-related losses without standard income limitations.
Rep. Judy Chu Commemorates One Year Anniversary of Eaton Fire and Advocates for Disaster Aid
Rep. Chu has proposed a bill aimed at providing tax relief to fire survivors. The Disaster Survivors Tax Relief and Recovery Act would allow survivors to use their 2024 income for the Child Tax Credit and Earned Income Tax Credit if it is lower than their 2025 income.
Source Information
Document Type
Congressional Bill
Official Title
Disaster Survivors Tax Relief and Recovery Act
Data Sources
Sponsor
Cosponsors
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