WASHINGTON, D.C. (KWWL) — On Monday, a new bill was signed into law that will provide tax relief for those affected in presidentially declared disaster areas in 2020.
“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 Iowa Senator Joni Ernst.
The Disaster Tax Relief Act of 2020 was introduced in September after Ernst and fellow Iowa Senator Chuck Grassley and toured the damage caused by the August Derecho.
“Iowa families, farmers and businesses have faced extremely difficult circumstances throughout this pandemic. On top of that, many of them are still facing the aftermath of the historic derecho. This bipartisan legislation will allow Iowans to keep more of their own hard-earned money to get back on their feet, rebuild and continue moving forward,” Grassley said.
Grassley’s office broke down the bill:
- Remove penalties on early withdrawals from retirement accounts so folks can access their savings to help cover the cost of certain storm-related expenses.
- Provide a tax credit for employee retention during business interruption.
- Encourage charitable giving to affected areas, by suspending limits on deductions for certain contributions.
- Create special rules for qualified disaster-related personal casualty losses.
- Allow 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.
According to a news release from Senator Grassley’s office, relief would be for declared disaster areas for major disasters declared on or after January 1, 2020, through the period ending 60 days after the date of enactment.