Botht the House and the Senate have passed bills designed to provide tax relief for those affected by Hurricane Katrina and those trying to provide relief. The bills are different though and we don't know what will come out of conference. All the same, I thought I'd post this list of some of the possible items that are in the bills:
The cuts are designed to give people affected by the hurricane easier access to their retirement savings and to encourage charitable giving. Among other provisions, both versions of the plan waive penalties for victims who withdraw cash from their retirement savings accounts, solidify an earned income tax credit for the working poor, and provide a $2,000 tax break to anyone who houses victims for two months or longer.
Other provisions include:
- The extension of a tax credit for employers who keep workers in the disaster zone on their payroll;
- The elimination of a limitation on casualty losses, making it easier for victims to get a refund of taxes they paid in 2004; and,
- An allowance for survivors to exempt from taxes any debts that are canceled because of the hurricane. Canceled debt is usually considered taxable income.
It looks like we'll see a second bill later, so who knows what all we'll end up with.