Disaster Survivors Tax Relief and Recovery Act
Summary
The Disaster Survivors Tax Relief and Recovery Act aims to provide tax relief and recovery measures for individuals and businesses affected by qualified federal disasters. It includes provisions such as temporary special rules for determining earned income for tax credits, modifications to limitations on charitable contributions, and special disaster-related rules for the use of retirement funds. The bill also addresses casualty losses and extends certain wildfire relief provisions, along with allocating additional low-income housing credits.
Expected Effects
This act will likely reduce the tax burden on disaster survivors and incentivize charitable giving towards disaster relief efforts. It could also provide greater access to retirement funds for those facing economic hardship due to disasters. Additionally, the bill could stimulate housing development in affected areas through increased low-income housing credits.
Potential Benefits
- Provides tax relief for individuals and businesses in qualified disaster areas.
- Temporarily modifies limitations on charitable contributions, encouraging donations to disaster relief.
- Allows for tax-favored withdrawals from retirement plans for disaster-related expenses.
- Increases the standard deduction for individuals with net disaster losses.
- Extends the exclusion from gross income for compensation for losses resulting from certain wildfires.
Potential Disadvantages
- The complexity of the tax code may increase due to temporary modifications and special rules.
- Potential for errors in tax filings related to earned income determination and disaster-related losses.
- Increased government spending may result from tax relief measures, potentially impacting the national debt.
- The benefits are limited to specific qualified disaster areas, potentially excluding those affected by other disasters.
- Some provisions, such as increased low-income housing credits, may take time to show tangible results.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble) by providing relief to disaster-stricken communities. Congress's power to lay and collect taxes (Article I, Section 8) is exercised in a manner that aims to alleviate the financial burden on those affected by disasters. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).