[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 536 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 536
To provide tax relief for the victims of Hurricane Florence, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 14, 2019
Mr. Holding (for himself, Mr. Rouzer, Mr. Meadows, Mr. Walker, Mr.
Hudson, Mr. Budd, Ms. Foxx of North Carolina, Mr. Rice of South
Carolina, and Mr. Jones) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To provide tax relief for the victims of Hurricane Florence, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Hurricane Florence Tax Relief Act''.
SEC. 2. HURRICANE FLORENCE DISASTER ZONE AND DISASTER AREA.
(a) Hurricane Florence Disaster Zone.--For purposes of this Act,
the term ``Hurricane Florence disaster zone'' means that portion of the
Hurricane Florence disaster area determined by the President to warrant
individual or individual and public assistance from the Federal
Government under such Act by reason of Hurricane Florence.
(b) Hurricane Florence Disaster Area.--The term ``Hurricane
Florence disaster area'' means an area with respect to which a major
disaster has been declared by the President before October 1, 2018,
under section 401 of such Act by reason of Hurricane Florence.
SEC. 3. SPECIAL 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
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
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 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
distribution, a plan shall not be treated as violating
any requirement of the Internal Revenue Code of 1986
merely because the plan treats such distribution as a
qualified hurricane 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 the Internal Revenue Code
of 1986.
(3) Amount distributed may be repaid.--
(A) In general.--Any individual who receives a
qualified hurricane distribution may, at any time
during the 3-year period beginning on the day after the
date on which such distribution was received, make one
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 the
Internal Revenue Code of 1986, as the case may be.
(B) Treatment of repayments of distributions from
eligible retirement plans other than iras.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to subparagraph (A) with
respect to a qualified hurricane 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 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 for distributions from
iras.--For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to
subparagraph (A) with respect to a qualified hurricane
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 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 distribution.--Except as
provided in paragraph (2), the term ``qualified
hurricane distribution'' means any distribution from an
eligible retirement plan made on or after September 13,
2018, and before January 1, 2020, to an individual
whose principal place of abode on September 13, 2018,
is located in the Hurricane Florence disaster area and
who has sustained an economic loss by reason of
Hurricane Florence.
(B) Eligible retirement plan.--The term ``eligible
retirement plan'' shall have the meaning given such
term by section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
(5) Income inclusion spread over 3-year period.--
(A) In general.--In the case of any qualified
hurricane 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 subparagraph (E) of
section 408A(d)(3) of the Internal Revenue Code of 1986
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 the
Internal Revenue Code of 1986, qualified hurricane
distributions shall not be treated as eligible rollover
distributions.
(B) Qualified hurricane distributions treated as
meeting plan distribution requirements.--For purposes
the Internal Revenue Code of 1986, a qualified
hurricane distribution shall be treated as meeting the
requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(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 period beginning
on September 13, 2018, and ending on February 28, 2019,
make one 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 the Internal Revenue Code of 1986) 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)(ii) (but only to the extent such
distribution relates to financial hardship),
403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue
Code of 1986;
(B) received after February 28, 2018, and before
October 1, 2018; and
(C) which was to be used to purchase or construct a
principal residence in the Hurricane Florence disaster
area, but which was not so purchased or constructed on
account of Hurricane Florence.
(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 the
Internal Revenue Code of 1986) to a qualified individual made
during the period beginning on the date of the enactment of
this Act and ending on December 31, 2019--
(A) clause (i) of section 72(p)(2)(A) 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 a qualified
individual with an outstanding loan on or after September 13,
2018, from a qualified employer plan (as defined in section
72(p)(4) of the Internal Revenue Code of 1986)--
(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 September 13, 2018, and ending on December
31, 2019, such due date shall be delayed for 1 year;
(B) any subsequent repayments with respect to any
such loan shall be appropriately adjusted to reflect
the delay in the due date under paragraph (1) 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) shall be disregarded.
(3) Qualified hurricane florence individual.--For purposes
of this subsection, the term ``qualified Hurricane Florence
individual'' means an individual whose principal place of abode
on September 13, 2018, is located in the Hurricane Florence
disaster area and who has sustained an economic loss by reason
of Hurricane Florence.
(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,
2020, or such later date as the Secretary may
prescribe.
In the case of a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of 1986),
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.
SEC. 4. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY HURRICANE
FLORENCE.
(a) In General.--For purposes of section 38 of the Internal Revenue
Code of 1986, in the case of an eligible employer, the Hurricane
Florence employee retention credit shall be treated as a credit listed
in subsection (b) of such section. For purposes of this section, the
Hurricane Florence employee retention credit for any taxable year is an
amount equal to 40 percent of the qualified wages with respect to each
eligible employee of such employer for such taxable year. For purposes
of the preceding sentence, the amount of qualified wages which may be
taken into account with respect to any individual shall not exceed
$6,000.
(b) Definitions.--For purposes of this section--
(1) Eligible employer.--The term ``eligible employer''
means any employer--
(A) which conducted an active trade or business on
September 13, 2018, in the Hurricane Florence disaster
zone; and
(B) with respect to whom the trade or business
described in subparagraph (A) is inoperable on any day
after September 13, 2018, and before January 1, 2019,
as a result of damage sustained by reason of Hurricane
Florence.
(2) Eligible employee.--The term ``eligible employee''
means with respect to an eligible employer an employee whose
principal place of employment on September 13, 2018, with such
eligible employer was in the Hurricane Florence disaster zone.
(3) Qualified wages.--The term ``qualified wages'' means
wages (as defined in section 51(c)(1) of the Internal Revenue
Code of 1986, but without regard to section 3306(b)(2)(B) of
such Code) paid or incurred by an eligible employer with
respect to an eligible employee on any day after September 13,
2018, and before January 1, 2019, which occurs during the
period--
(A) beginning on the date on which the trade or
business described in paragraph (1) first became
inoperable at the principal place of employment of the
employee immediately before Hurricane Florence; and
(B) ending on the date on which such trade or
business has resumed significant operations at such
principal place of employment.
Such term shall include wages paid without regard to whether
the employee performs no services, performs services at a
different place of employment than such principal place of
employment, or performs services at such principal place of
employment before significant operations have resumed.
(c) Certain Rules To Apply.--For purposes of this section, rules
similar to the rules of sections 51(i)(1), 52, and 280C(a), of the
Internal Revenue Code of 1986, shall apply.
(d) Employee Not Taken Into Account More Than Once.--An employee
shall not be treated as an eligible employee for purposes of this
section for any period with respect to any employer if such employer is
allowed a credit under section 51 of the Internal Revenue Code of 1986
with respect to such employee for such period.
SEC. 5. ADDITIONAL DISASTER-RELATED TAX RELIEF PROVISIONS.
(a) Temporary Suspension of Limitations on Charitable
Contributions.--
(1) In general.--Except as otherwise provided in paragraph
(2), subsection (b) of section 170 of the Internal Revenue Code
of 1986 shall not apply to qualified contributions and such
contributions shall not be taken into account for purposes of
applying subsections (b) and (d) of such section to other
contributions.
(2) Treatment of excess contributions.--For purposes of
section 170 of the Internal Revenue Code of 1986--
(A) Individuals.--In the case of an individual--
(i) Limitation.--Any qualified contribution
shall be allowed only to the extent that the
aggregate of such contributions does not exceed
the excess of the taxpayer's contribution base
(as defined in subparagraph (H) of section
170(b)(1) of such Code) over the amount of all
other charitable contributions allowed under
section 170(b)(1) of such Code.
(ii) Carryover.--If the aggregate amount of
qualified contributions made in the
contribution year (within the meaning of
section 170(d)(1) of such Code) exceeds the
limitation of clause (i), such excess shall be
added to the excess described in the portion of
subparagraph (A) of such section which precedes
clause (i) thereof for purposes of applying
such section.
(B) Corporations.--In the case of a corporation--
(i) Limitation.--Any qualified contribution
shall be allowed only to the extent that the
aggregate of such contributions does not exceed
the excess of the taxpayer's taxable income (as
determined under paragraph (2) of section
170(b) of such Code) over the amount of all
other charitable contributions allowed under
such paragraph.
(ii) Carryover.--Rules similar to the rules
of subparagraph (A)(ii) shall apply for
purposes of this subparagraph.
(3) Qualified contributions.--
(A) In general.--For purposes of this subsection,
the term ``qualified contribution'' means any
charitable contribution (as defined in section 170(c)
of the Internal Revenue Code of 1986) if--
(i) such contribution--
(I) is paid during the period
beginning on September 13, 2018, and
ending on December 31, 2018, in cash to
an organization described in section
170(b)(1)(A) of such Code; and
(II) is made for relief efforts in
the Hurricane Florence disaster area;
(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
described in clause (i)(II); and
(iii) the taxpayer has elected the
application of this subsection with respect to
such contribution.
(B) Exception.--Such term shall not include a
contribution by a donor if the contribution is--
(i) to an organization described in section
509(a)(3) of the Internal Revenue Code of 1986;
or
(ii) for the establishment of a new, or
maintenance of an existing, donor advised fund
(as defined in section 4966(d)(2) of such
Code).
(C) Application of election to partnerships and s
corporations.--In the case of a partnership or S
corporation, the election under subparagraph (A)(iii)
shall be made separately by each partner or
shareholder.
(b) Special Rules for Qualified Disaster-Related Personal Casualty
Losses.--
(1) In general.--If an individual has a net disaster loss
for any taxable year--
(A) the amount determined under section
165(h)(2)(A)(ii) of the Internal Revenue Code of 1986
shall be equal to the sum of--
(i) such net disaster loss; and
(ii) so much of the excess referred to in
the matter preceding clause (i) of section
165(h)(2)(A) of such Code (reduced by the
amount in clause (i) of this subparagraph) as
exceeds 10 percent of the adjusted gross income
of the individual;
(B) section 165(h)(1) of such Code shall be applied
by substituting ``$500'' for ``$500 ($100 for taxable
years beginning after December 31, 2009)'';
(C) the standard deduction determined under section
63(c) of such Code shall be increased by the net
disaster loss; and
(D) section 56(b)(1)(E) of such Code shall not
apply to so much of the standard deduction as is
attributable to the increase under subparagraph (C) of
this paragraph.
(2) Net disaster loss.--For purposes of this subsection,
the term ``net disaster loss'' means the excess of qualified
disaster-related personal casualty losses over personal
casualty gains (as defined in section 165(h)(3)(A) of the
Internal Revenue Code of 1986).
(3) Qualified disaster-related personal casualty losses.--
For purposes of this subsection, the term ``qualified disaster-
related personal casualty losses'' means losses described in
section 165(c)(3) of the Internal Revenue Code of 1986 which
arise in the Hurricane Florence disaster area on or after
September 13, 2018, and which are attributable to Hurricane
Florence.
(c) Special Rule for Determining Earned Income.--
(1) In general.--In the case of a qualified Hurricane
Florence individual, if the earned income of the taxpayer for
the taxable year which includes September 13, 2018, is less
than the earned income of the taxpayer for the preceding
taxable year, the credits allowed under sections 24(d) and 32
of the Internal Revenue Code of 1986 may, at the election of
the taxpayer, be determined by substituting--
(A) such earned income for the preceding taxable
year; for
(B) such earned income for the taxable year which
includes September 13, 2018.
(2) Qualified hurricane florence individual.--For purposes
of this subsection, the term ``qualified Hurricane Florence
individual'' means any individual whose principal place of
abode on September 13, 2018, was located--
(A) in the Hurricane Florence disaster zone; or
(B) in the Hurricane Florence disaster area (but
outside the Hurricane Florence disaster zone) and such
individual was displaced from such principal place of
abode by reason of Hurricane Florence.
(3) Earned income.--For purposes of this subsection, the
term ``earned income'' has the meaning given such term under
section 32(c) of the Internal Revenue Code of 1986.
(4) Special rules.--
(A) Application to joint returns.--For purposes of
paragraph (1), in the case of a joint return for a
taxable year which includes September 13, 2018--
(i) such paragraph shall apply if either
spouse is a qualified individual; and
(ii) 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.
(B) Uniform application of election.--Any election
made under paragraph (1) shall apply with respect to
both sections 24(d) and 32, of the Internal Revenue
Code of 1986.
(C) Errors treated as mathematical error.--For
purposes of section 6213 of the Internal Revenue Code
of 1986, an incorrect use on a return of earned income
pursuant to paragraph (1) shall be treated as a
mathematical or clerical error.
(D) No effect on determination of gross income,
etc.--Except as otherwise provided in this subsection,
the Internal Revenue Code of 1986 shall be applied
without regard to any substitution under paragraph (1).
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