Short title; table of contents

(a)

Short title

This Act may be cited as the

Hurricane Helene and Milton Tax Relief Act of 2025

.(b)

Table of contents

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

Sec. 3. Earned income credit determined based on preceding taxable year income with respect to qualified hurricane disaster areas.

Sec. 4. Increased limitation on charitable contributions for qualified hurricane disaster relief; certain contributions paid before April 15, 2025, treated as paid in 2024.

Sec. 5. Special hurricane disaster-related rules for use of retirement funds.

Definitions

For purposes of this Act—(a)

Eligible individual

The term eligible individual means an individual whose principal place of abode at any time during the incident period is located in the qualified hurricane disaster area and who has sustained an economic loss by reason of Hurricane Helene or Hurricane Milton.(b)

Qualified hurricane disaster area

The term qualified hurricane disaster area means an area with respect to which a major disaster has been declared by the President (before the date of the enactment of this Act) under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Helene or Hurricane Milton.(c)

Incident period

The term incident period means the period beginning on September 28, 2024, and ending on November 2, 2024.

Earned income credit determined based on preceding taxable year income with respect to qualified hurricane disaster areas

(a)

In general

In the case of an eligible individual, if the earned income of the taxpayer for the applicable taxable year is less than the earned income of the taxpayer for the preceding taxable year, the credit allowed under section 32 of the Internal Revenue Code of 1986 for the applicable taxable year may, at the election of the taxpayer, be determined by substituting—(1)such earned income for the preceding taxable year, for(2)such earned income for the applicable taxable year.(b)

Applicable tax year

For purposes of this section, the term applicable taxable year means any taxable year which includes any portion of the incident period. (c)

Earned income

For purposes of this section, the term earned income has the meaning given such term under section 32(c) of such Code.(d)

Special rules

(1)

Application to joint returns

For purposes of subsection (a), in the case of a joint return for an applicable taxable year—(A)such subsection shall apply if either spouse is an eligible individual, and(B)the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year.(2)

Errors treated as mathematical error

For purposes of section 6213 of such Code, an incorrect use on a return of earned income pursuant to subsection (a) shall be treated as a mathematical or clerical error.(3)

No effect on determination of gross income, etc

Except as otherwise provided in this section, such Code shall be applied without regard to any substitution under subsection (a).(4)

Limitation to single taxable year

No taxpayer may make an election under subsection (a) if such taxpayer (or in the case of a joint return, the taxpayer’s spouse) made such an election for any preceding taxable year.

Increased limitation on charitable contributions for qualified hurricane disaster relief; certain contributions paid before April 15, 2025, treated as paid in 2024

(a)

Qualified hurricane disaster contributions

(1)

Individuals

In the case of any qualified hurricane disaster contribution, notwithstanding section 170(b) of such Code, the total amount of such contributions which may be taken into account under section 170(a) of such Code shall not exceed the excess of—(A)the taxpayer’s contribution base, over(B)the amount of all other charitable contributions allowable under section 170(b)(1) of such Code.(2)

Carryover

(A)

In general

If the aggregate amount of contributions described in paragraph (1) exceeds the limitation under such paragraph, such excess shall be treated (in a manner consistent with the rules of subsection 170(d)(1) of such Code) as a charitable contribution to which paragraph (1) applies in each of the 5 succeeding years in order of time.(B)

Coordination with deduction for charitable contributions

For purposes of applying this paragraph and sections 170(b)(1)(G) and 170(d)(1) of such Code, contributions described in paragraph (1) shall not be treated as described in subparagraph (A) or (G) of section 170(b)(1) of such Code and such subparagraphs shall be applied without regard to such contributions.(3)

Application of election to partnerships and s corporations

In the case of a partnership or S corporation, the election under subsection (e)(3)(A)(iii) shall be made separately by each partner or shareholder.(b)

Corporations

(1)

In general

In the case of any qualified hurricane disaster contribution, notwithstanding section 170(b) of such Code, the total amount of such contributions which may be taken into account under section 170(a) of such Code shall not exceed the excess of—(A)20 percent of the taxpayer’s taxable income, over(B)the amount of charitable contributions allowed under section 170(b)(2)(A) of such Code.(2)

Carryover

If the aggregate amount of contributions described in paragraph (1) exceeds the limitation under such paragraph, such excess shall be treated (in a manner consistent with the rules of section 170(d)(1) of such Code) as a charitable contribution to which paragraph (1) applies in each of the 5 succeeding years in order of time.(3)

Coordination with deduction for charitable contributions

For purposes of applying this paragraph and sections 170(b)(2) of such Code, contributions described in paragraph (1) shall not be treated as described in subparagraph (A), (B), or (C) of section 170(b)(2) of such Code and such subparagraphs shall be applied without regard to such contributions.(c)

Deduction allowed above the line

In the case of an individual—(1)the standard deduction otherwise determined under section 63 of such Code shall be increased by so much of the deduction allowed under section 170 of such Code as would not be so allowed if determined without regard to this section, and(2)section 56(b)(1)(D) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under paragraph (1).(d)

Contributions treated as made in prior year

For purposes of this section, a taxpayer may treat any qualified hurricane disaster contribution which is paid after December 31, 2024, and on or before April 15, 2025, as if such contribution was made on December 31, 2024, and not in 2025.(e)

Definitions

For purposes of this section—(1)

Charitable contribution

The term charitable contribution has the meaning given such term in section 170(c) of such Code.(2)

Contribution base

The term contribution base has the meaning given such term in section 170(b)(1)(H) of such Code. (3)

Qualified hurricane disaster contribution

(A)

In general

The term qualified hurricane disaster contribution means any charitable contribution if—(i)such contribution—(I)is paid on or after the first day of the incident period and before December 31, 2025, in cash to an organization described in section 170(b)(1)(A) of such Code, and(II)is made for relief efforts in a qualified hurricane disaster area related to Hurricane Helene or Hurricane Milton,(ii)the taxpayer obtains from such organization contemporaneous written acknowledgment (within the meaning of section 170(f)(8) of such Code) that such contribution was used (or is to be used) for relief efforts in a qualified hurricane disaster area related to Hurricane Helene or Hurricane Milton, and(iii)the taxpayer has elected the application of this section with respect to such contribution.(B)

Exception

A qualified hurricane disaster contribution shall not include a contribution by a donor if the contribution is—(i)to an organization described in section 509(a)(3) of such Code, or(ii)for establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) of such Code).

Special hurricane disaster-related rules for use of retirement funds

(a)

Tax-Favored withdrawals from retirement plans

(1)

In general

Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified hurricane disaster distribution.(2)

Aggregate dollar limitation

(A)

In general

For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified hurricane disaster distributions for any taxable year shall not exceed the excess (if any) of—(i) $100,000, over(ii)the aggregate amounts treated as qualified hurricane disaster distributions received by such individual for all prior taxable years.(B)

Treatment of plan distributions

If a distribution to an individual would (without regard to subparagraph (A)) be a qualified hurricane disaster distribution, a plan shall not be treated as violating any requirement of such Code merely because the plan treats such distribution as a qualified hurricane disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.(C)

Controlled group

For purposes of subparagraph (B), the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of such Code.(3)

Amount distributed may be repaid

(A)

In general

Any individual who receives a qualified hurricane disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of such Code, as the case may be.(B)

Treatment of repayments of distributions from eligible retirement plans other than IRAs

For purposes of such Code, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified hurricane disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.(C)

Treatment of repayments of distributions from IRAs

For purposes of such Code, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane disaster distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the qualified hurricane disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.(4)

Definitions

For purposes of this subsection—(A)

qualified hurricane disaster distribution

Except as provided in paragraph (2), the term qualified hurricane disaster distribution means any distribution from an eligible retirement plan made—(i)on or after the first day of the incident period and before December 31, 2025, and(ii)to an eligible individual.(B)

Eligible retirement plan

The term eligible retirement plan shall have the meaning given such term by section 402(c)(8)(B) of such Code.(5)

Income inclusion spread over 3-year period

(A)

In general

In the case of any qualified hurricane disaster distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.(B)

Special rule

For purposes of subparagraph (A), rules similar to the rules of section 408A(d)(3)(E) of such Code shall apply.(6)

Special rules

(A)

Exemption of distributions from trustee to trustee transfer and withholding rules

For purposes of sections 401(a)(31), 402(f), and 3405 of such Code, qualified hurricane disaster distributions shall not be treated as eligible rollover distributions.(B)

qualified hurricane disaster distributions treated as meeting plan distribution requirements

For purposes of such Code, a qualified hurricane disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and section 8433(h)(1) of title 5, United States Code, and, in the case of a money purchase pension plan, a qualified hurricane disaster distribution which is an in-service withdrawal shall be treated as meeting the distribution rules of section 401(a) of such Code.(b)

Recontributions of withdrawals for home purchases

(1)

Recontributions

(A)

In general

Any individual who received a qualified distribution may, during the applicable period, make 1 or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of such Code) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of such Code, as the case may be.(B)

Treatment of repayments

Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection.(2)

Qualified distribution

For purposes of this subsection, the term qualified distribution means any distribution—(A)described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), 403(b)(11)(B), or 72(t)(2)(F), of such Code,(B)which was to be used to purchase or construct a principal residence in a qualified hurricane disaster area, but which was not so used on account of Hurricane Helene or Hurricane Milton, and(C)which was received during the period beginning on the date which is 180 days before the first day of the incident period and ending on the date which is 30 days after the last day of such incident period.(3)

Applicable period

For purposes of this subsection, the term applicable period means, in the case of a principal residence in a qualified hurricane disaster area, the period beginning on the first day of the incident period and ending on December 31, 2025.(c)

Loans from qualified plans

(1)

Increase in limit on loans not treated as distributions

In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of such Code) to an eligible individual made during the period beginning on the date of the enactment of this Act and ending on June 30, 2025—(A)section 72(p)(2)(A)(i) of such Code shall be applied by substituting $100,000 for $50,000, and(B)clause (ii) of such section shall be applied by substituting the present value of the nonforfeitable accrued benefit of the employee under the plan for one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan.(2)

Delay of repayment

In the case of an eligible individual with an outstanding loan (on or after the first day of the incident period) from a qualified employer plan (as defined in section 72(p)(4) of such Code)—(A)if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the first day of the incident period and ending on the date which is 180 days after the last day of such incident period, such due date shall be delayed for 1 year (or, if later, until December 31, 2025),(B)any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under subparagraph (A) and any interest accruing during such delay, and(C)in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2) of such Code, the period described in subparagraph (A) of this paragraph shall be disregarded.(d)

Provisions relating to plan amendments

(1)

In general

If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i).(2)

Amendments to which subsection applies

(A)

In general

This subsection shall apply to any amendment to any plan or annuity contract which is made—(i)pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary or the Secretary of Labor under any provision of this section, and(ii)on or before the last day of the first plan year beginning on or after January 1, 2025, or such later date as the Secretary may prescribe.

In the case of a governmental plan (as defined in section 414(d) of such Code), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).

(B)

Conditions

This subsection shall not apply to any amendment unless—(i)during the period—(I)beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and(II)ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),

the plan or contract is operated as if such plan or contract amendment were in effect, and

(ii)such plan or contract amendment applies retroactively for such period.