On December 20, 2019, President Trump signed the Further Consolidated Appropriations Act of 2020. This legislation contains important tax changes, including an extension of tax provisions that expired after 2017, after 2018, and several that were to expire after 2019.
The Act includes the SECURE Act, which changes the rules for required distributions from retirement plans and many other modifications to the rules for qualified plans and IRAs. In addition, the Act provides relief for those affected by all Presidentially Declared Disasters during the period beginning January 1, 2018 and ending 60 days after December 20, 2019. Therefore, this relief includes special tax benefits for victims of casualty losses resulting from Hurricanes Florence and Michael.
Among other things, the bill 1) removes the requirement to reduce the casualty loss deduction by 10% of an individual’s adjusted gross income; 2) allows individuals using the standard deduction to take the casualty loss deduction; 3) allows victims to take penalty-free distributions from their retirement plans up to $100,000; 4) provides more liberal qualified plan loan provisions; 5) contains a “retention credit” for an employer that continued to pay employees while the employer’s business was inoperable because of the hurricanes; and 6) provides increased charitable contribution limits for individuals and corporations making contributions to charitable organizations for the benefit of hurricane victims.
When NCACPA met with Senator Burr and Senator Tillis this past May on Capitol Hill, they assured us they were evaluating the best vehicles to pass disaster relief legislation. The two senators formed a bipartisan coalition in September 2019 that championed the relief provisions found in the Consolidated Appropriations Act.
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