The House and the Senate have approved a final version of a bill that will offer disaster survivors and donors to Hurricane Katrina relief funds a variety of tax breaks and incentives.[@@]
The House voted Wednesday to approve the final version of the bill, H.R. 3768, 422-0, and the Senate passed the bill by a voice vote.
“I’m pleased this has been a bipartisan effort and look forward to the legislation being signed into law soon,” says House Ways and Means Committee Chairman William Thomas, R-Calif.
H.R. 3768 was sponsored by Rep. Jim McCrery, R-La., a Ways and Means Committee member.
Sections of H.R. 3768 would:
- Waive the 10% penalty tax on early withdrawals of funds from individual retirement accounts, defined benefit pension plans, 401(k) plans, 403(b) plans and 457 plans for individuals who have been living in what are federally declared disaster areas as a result of Katrina.
- Raise the permitted individual limit for cash charitable contributions to 60% of gross income, from 50%, for donations made this year.
- Give the IRS commissioner permission to extend deadlines for filing tax returns and paying income, estate and gift taxes.
- Increase the limit on tax-deductible casualty losses.
- Extend the period in which homes or businesses have to recognize gains on property damaged or destroyed as a result of a federally designated catastrophe.