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On September 21, 2005, the House and Senate unanimously passed the Hurricane Katrina Tax Relief Package (H.R. 3768). The bill was signed on Friday, September 23, 2005 by President Bush.

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Hurricane Katrina Relief Tax Package

Hurricane Katrina Relief Tax Package

 

On September 21, 2005, the House and Senate unanimously passed the Hurricane Katrina Tax Relief Package (H.R. 3768). The bill was signed on Friday, September 23, 2005 by President Bush.

 

House Ways and Means Chair Bill Thomas (R-CA) stated, "It's important that this tax legislation is signed into law quickly to help ease the burdens on those affected by Hurricane Katrina."

 

Sen. Max Baucus (D-MT) approved of the bill and noted, "Passing this tax package and getting it to the president is the first step in tackling the devastating circumstances Katrina has left behind. We are also working to provide long-term tax help, but today's package will give urgent relief so victims can start picking up the pieces and putting their lives back together."

 

Senate Finance Chair Charles Grassley (R-IA) also was pleased and stated, "The immediate-relief package will help get short-term aid to hurricane victims by encouraging food donations and the employment of displaced individuals, for example. For those who've suffered casualty losses, we've liberalized the tax rules to permit affected taxpayers to deduct losses from damaged property."

 

The legislation also has several new rules regarding charitable deduction, including:

 

!         Individuals are permitted to make contributions up to 100% of income from August 28 to December 31, 2005 to public charities and deduct 100% of the contributions.  This provision effectively permits unlimited IRA withdrawals and gifts to charity.  The charitable donation does not need to be for Katrina relief.

 

!         Corporations also may donate up to 100% of taxable income, but only for Katrina relief.

 

!         An additional personal exemption of $500 per displaced person is permitted for up to four persons. The taxpayer must host the displaced person(s) free for at least 60 days.

 

!         The charitable mileage rate of 14 cents per mile for Katrina relief work is increased to 70% of the business rate for the period August 25, 2005 to December 31, 2006.

 

!         Katrina volunteers may be reimbursed for costs of auto use, but only at a rate that does not exceed the business mileage rate.

 

!         All taxpayers may claim the enhanced deduction for gifts of "apparently wholesome food" that now are available to corporations. Deduction limits are 10% of income for this type gift.

 

!         All qualified book inventory gifts may receive an enhanced deduction.


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Physical Address
1808 Clark Street, Carterville, Illinois 62918
Phone: 618-985-4529
Toll Free: 800-336-4529

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1808 Clark Street
Carterville, Illinois 62918
Phone: (618) 985-4529