Tax relief related to Hurricane Ian, Hurricane Nicole, and Hurricane Fiona

(a)

Definitions

For purposes of this section—(1)

Hurricane Ian disaster area

The term Hurricane Ian 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 section under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Ian. (2)

Hurricane Nicole disaster area

The term Hurricane Nicole 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 section under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Nicole. (3)

Hurricane Fiona disaster area

The term Hurricane Fiona 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 section under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Fiona. (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)in the case of qualified disaster-related personal casualty losses, section 165(h)(1) of such Code shall be applied to 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—(A)which arise in the Hurricane Ian disaster area on or after September 23, 2022, and which are attributable to Hurricane Ian, (B)which arise in the Hurricane Nicole disaster area on or after November 7, 2022, and which are attributable to Hurricane Nicole, or(C)which arise in the Hurricane Fiona disaster area on or after September 17, 2022, and which are attributable to Hurricane Fiona.(c)

Application to Puerto Rico

(1)

In general

The Secretary of the Treasury shall pay to Puerto Rico amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of Puerto Rico by reason of the provisions of this section if a mirror code tax system had been in effect in Puerto Rico. The preceding sentence shall not apply with respect to Puerto Rico unless Puerto Rico has a plan, which has been approved by the Secretary of the Treasury, under which Puerto Rico will promptly distribute such payments to its residents.(2)

Definition and special rules

(A)

Mirror code tax system

For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.(B)

Treatment of payments

For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.(C)

Coordination with United States income taxes

In the case of any person with respect to whom a tax benefit is taken into account with respect to the taxes imposed by any possession of the United States by reason of this section, the Internal Revenue Code of 1986 shall be applied with respect to such person without regard to the provisions of this section which provide such benefit.