September 28, 2017 Congress passes hurricane tax provisions with FAA extension The House and Senate on September 28, 2017, approved a bill (H.R. 3823) that combines temporary tax relief to the victims of Hurricanes Harvey, Irma, and Maria with an extension through March 31, 2018 of the Federal Aviation Administration (FAA) authorization and taxes that provide funding. The bill will now be sent to the President for his signature ahead of the current FAA reauthorization/funding expiration on September 30. The "Disaster Tax Relief and Airport and Airway Extension Act of 2017" was amended from the version unveiled September 22 by House Ways and Means Committee Chairman Kevin Brady (R-TX) and Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) to expand the application of disaster-related tax relief to the US Virgin Islands and Puerto Rico. First, the House approved the bill, then the Senate approved a version that stripped the title related to flood insurance reforms. The House then approved the amended measure by voice vote. The original House bill's language had clarified that flood insurance offered by a private carrier outside of the federal National Flood Insurance Program (NFIP) can satisfy the program's mandatory-purchase requirement. It also would have directed FEMA to consider policyholders who drop an NFIP policy and then later return to the NFIP as having continuous coverage, if they can demonstrate that a flood policy from a private firm was maintained throughout the interim period. Those provisions, drawn from a bill (H.R. 1422) passed unanimously by the House Financial Services Committee in June, were intended to promote the development of a private flood insurance market. Some senators and House members, however, objected that the flood insurance issue should be addressed in the context of an NFIP reauthorization bill later this year. Tax provisions in the approved bill include: — Temporary suspension of limitations on the deduction for charitable contributions associated with qualified hurricane relief made before December 31, 2017 — An exception to the 10% early retirement plan withdrawal penalty for qualified hurricane relief distributions — A tax credit for 40% of wages (up to $6,000 per employee) paid by a disaster-affected employer to an employee from a core disaster area — With respect to uncompensated losses arising in the disaster area, elimination of the current law requirements that personal casualty losses must exceed 10% of Adjusted Gross Income to qualify for deduction, and elimination of the current law requirement that taxpayers must itemize deductions to access this tax relief ———————————————
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