What This Bill Does
This bill creates special tax relief rules for individuals who suffered property damage from Hurricane Ian, Hurricane Nicole, or Hurricane Fiona in declared disaster areas. It allows people to deduct more of their disaster-related losses from their taxes and increases their standard deduction (the amount of income that is not taxed) based on their losses.
Who It Affects
Individuals who had casualty losses (property damage or destruction) in Hurricane Ian, Hurricane Nicole, or Hurricane Fiona disaster areas. The Secretary of the Treasury. Puerto Rico residents and the government of Puerto Rico.
Key Provisions
- Individuals with net disaster losses can deduct qualified disaster-related losses plus any additional losses that exceed 10 percent of their adjusted gross income (total income before deductions) (Sec. 2(b)(1)(A)).
- The per-incident loss threshold for qualified disaster-related personal casualty losses is set at $500 instead of a higher amount (Sec. 2(b)(1)(B)).
- A person's standard deduction is increased by the amount of their net disaster loss, which reduces the amount of income that gets taxed (Sec. 2(b)(1)(C)).
- The Secretary of the Treasury must pay Puerto Rico an amount equal to the tax benefits Puerto Rico residents would have received, but only if Puerto Rico has an approved plan to distribute those payments to residents (Sec. 2(c)(1)).
- Qualified disaster losses include property damage occurring on or after September 23, 2022 from Hurricane Ian, on or after November 7, 2022 from Hurricane Nicole, or on or after September 17, 2022 from Hurricane Fiona (Sec. 2(b)(3)).
What Changes
If this bill becomes law, individuals in declared disaster areas can reduce their taxable income by claiming larger deductions for hurricane-related property losses. They also receive a larger standard deduction based on their disaster losses. Puerto Rico will receive federal payments to distribute to its residents for equivalent tax relief.
Important Definitions
"Hurricane Ian disaster area" means any area where the President declared a major disaster because of Hurricane Ian before this law passed (Sec. 2(a)(1)).
"Hurricane Nicole disaster area" means any area where the President declared a major disaster because of Hurricane Nicole before this law passed (Sec. 2(a)(2)).
"Hurricane Fiona disaster area" means any area where the President declared a major disaster because of Hurricane Fiona before this law passed (Sec. 2(a)(3)).
"Net disaster loss" means qualified disaster-related losses minus any gains from casualty events (Sec. 2(b)(2)).
"Mirror code tax system" means a possession of the United States taxes its residents' income by using the same federal tax rules as if that possession were part of the United States (Sec. 2(c)(2)(A)).
I
118TH CONGRESS
1ST SESSION H. R. 1494
To amend the Internal Revenue Code of 1986 to provide special rules for
casualty losses incurred by reason of Hurricane Ian, Hurricane Nicole,
and Hurricane Fiona.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 2023
Mr. DONALDS (for himself, Mr. C. SCOTT FRANKLIN of Florida, and Mr.
POSEY) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
special rules for casualty losses incurred by reason of
Hurricane Ian, Hurricane Nicole, and Hurricane Fiona.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Hurricane Tax Relief
4
Act’’.
5
SEC. 2. TAX RELIEF RELATED TO HURRICANE IAN, HURRI-
6
CANE NICOLE, AND HURRICANE FIONA.
7
(a) DEFINITIONS.—For purposes of this section—
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•HR 1494 IH
(1) HURRICANE
IAN
DISASTER
AREA.—The
1
term ‘‘Hurricane Ian disaster area’’ means an area
2
with respect to which a major disaster has been de-
3
clared by the President before the date of the enact-
4
ment of this section under section 401 of the Robert
5
T. Stafford Disaster Relief and Emergency Assist-
6
ance Act by reason of Hurricane Ian.
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(2) HURRICANE NICOLE DISASTER AREA.—The
8
term ‘‘Hurricane Nicole disaster area’’ means an
9
area with respect to which a major disaster has been
10
declared by the President before the date of the en-
11
actment of this section under section 401 of the
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Robert T. Stafford Disaster Relief and Emergency
13
Assistance Act by reason of Hurricane Nicole.
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(3) HURRICANE FIONA DISASTER AREA.—The
15
term ‘‘Hurricane Fiona disaster area’’ means an
16
area with respect to which a major disaster has been
17
declared by the President before the date of the en-
18
actment of this section under section 401 of the
19
Robert T. Stafford Disaster Relief and Emergency
20
Assistance Act by reason of Hurricane Fiona.
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(b) SPECIAL RULES FOR QUALIFIED DISASTER-RE-
22
LATED PERSONAL CASUALTY LOSSES.—
23
(1) IN GENERAL.—If an individual has a net
24
disaster loss for any taxable year—
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•HR 1494 IH
(A) the amount determined under section
1
165(h)(2)(A)(ii) of the Internal Revenue Code
2
of 1986 shall be equal to the sum of—
3
(i) such net disaster loss, and
4
(ii) so much of the excess referred to
5
in the matter preceding clause (i) of sec-
6
tion 165(h)(2)(A) of such Code (reduced
7
by the amount in clause (i) of this sub-
8
paragraph) as exceeds 10 percent of the
9
adjusted gross income of the individual,
10
(B) in the case of qualified disaster-related
11
personal casualty losses, section 165(h)(1) of
12
such Code shall be applied to by substituting
13
‘‘$500’’ for ‘‘$500 ($100 for taxable years be-
14
ginning after December 31, 2009)’’,
15
(C) the standard deduction determined
16
under section 63(c) of such Code shall be in-
17
creased by the net disaster loss, and
18
(D) section 56(b)(1)(E) of such Code shall
19
not apply to so much of the standard deduction
20
as is attributable to the increase under sub-
21
paragraph (C) of this paragraph.
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(2) NET DISASTER LOSS.—For purposes of this
23
subsection, the term ‘‘net disaster loss’’ means the
24
excess of qualified disaster-related personal casualty
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•HR 1494 IH
losses over personal casualty gains (as defined in
1
section 165(h)(3)(A) of the Internal Revenue Code
2
of 1986).
3
(3) QUALIFIED DISASTER-RELATED PERSONAL
4
CASUALTY
LOSSES.—For purposes of this sub-
5
section, the term ‘‘qualified disaster-related personal
6
casualty losses’’ means losses described in section
7
165(c)(3) of the Internal Revenue Code of 1986—
8
(A) which arise in the Hurricane Ian dis-
9
aster area on or after September 23, 2022, and
10
which are attributable to Hurricane Ian,
11
(B) which arise in the Hurricane Nicole
12
disaster area on or after November 7, 2022,
13
and which are attributable to Hurricane Nicole,
14
or
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(C) which arise in the Hurricane Fiona
16
disaster area on or after September 17, 2022,
17
and which are attributable to Hurricane Fiona.
18
(c) APPLICATION TO PUERTO RICO.—
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(1) IN GENERAL.—The Secretary of the Treas-
20
ury shall pay to Puerto Rico amounts estimated by
21
the Secretary of the Treasury as being equal to the
22
aggregate benefits that would have been provided to
23
residents of Puerto Rico by reason of the provisions
24
of this section if a mirror code tax system had been
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•HR 1494 IH
in effect in Puerto Rico. The preceding sentence
1
shall not apply with respect to Puerto Rico unless
2
Puerto Rico has a plan, which has been approved by
3
the Secretary of the Treasury, under which Puerto
4
Rico will promptly distribute such payments to its
5
residents.
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(2) DEFINITION AND SPECIAL RULES.—
7
(A) MIRROR CODE TAX SYSTEM.—For pur-
8
poses of this subsection, the term ‘‘mirror code
9
tax system’’ means, with respect to any posses-
10
sion of the United States, the income tax sys-
11
tem of such possession if the income tax liabil-
12
ity of the residents of such possession under
13
such system is determined by reference to the
14
income tax laws of the United States as if such
15
possession were the United States.
16
(B) TREATMENT OF PAYMENTS.—For pur-
17
poses of section 1324 of title 31, United States
18
Code, the payments under this subsection shall
19
be treated in the same manner as a refund due
20
from a credit provision referred to in subsection
21
(b)(2) of such section.
22
(C) COORDINATION WITH UNITED STATES
23
INCOME
TAXES.—In the case of any person
24
with respect to whom a tax benefit is taken into
25
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•HR 1494 IH
account with respect to the taxes imposed by
1
any possession of the United States by reason
2
of this section, the Internal Revenue Code of
3
1986 shall be applied with respect to such per-
4
son without regard to the provisions of this sec-
5
tion which provide such benefit.
6
Æ
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