Hurricane Tax Relief Update


We have previously published articles addressing the current deductibility of casualty losses related to Hurricanes Ian and Nicole, both of which caused significant damage to the State of Florida. These articles can be found here.

While President Biden declared Hurricanes Ian and Nicole federal disasters, thus allowing a deduction for related losses, the tax relief available for personal losses is limited due to the $100 dollar and adjusted gross income limitations that only allow a deduction for losses that exceed $100 and 10 percent of an individual’s adjusted gross income (“AGI”). In the past, Congress has enacted legislation waiving these limitations and imposing a single $500 limitation instead for federally declared disasters.

In order for personal losses related to Hurricanes Ian and Nicole to get this same preferential treatment, Congressman Byron Donalds (R-FL), joined by other representatives, introduced the Hurricane Tax Relief Act (“the Act”), H.R. 1494, on March 9, 2023. Senator Rick Scott (R-FL) introduced the Act to the Senate, bill S.764, on the same date. The Act, if passed, would treat Hurricanes Ian, Nicole, and Fiona as qualified disasters, resulting in a waiver of the $100 and 10 percent AGI limitations, and the implementation of a single $500 limitation for personal casualty losses resulting from these hurricanes. H.R. 1494 has been referred to the Committee on Ways and Means, and S.764 has been referred to the Committee on Finance. A similar though more limited bill, H.R. 1331, was introduced by W. Gregory Steube (R-FL) on March 1, 2023. This bill was also referred to the Committee on Ways and Means.

On April 3, 2023, Congressman Donalds, Senator Scott, and other Florida and Puerto Rico representatives sent a letter to President Joe Biden urging him to support the Act and encourage its passage. The letter can be read here.

We will continue to monitor the progress of the Act and will provide updates as the Act makes its way through the legislative process.

About the Author(s)

Amy is a Principal and the Chair of the Tax Advisory Group at HBK CPAs & Consultants. The Tax Advisory Group is a group of highly specialized professionals who provide tax training to our team members, oversee compliance with tax policies in order to mitigate risk to the firm, and provide tax planning and consulting services for our clients.

Amy is the Co-National Director of the Nonprofit Solutions group. She also leads the HBK's diversity and inclusion initiative.

Amy specializes in estate, gift, trust, individual, and nonprofit taxation. She is skilled at researching complicated tax issues, consulting on complex estate plans, and providing guidance for our clients to ensure they are in compliance with their tax filing responsibilities.

Amy enjoys sharing her knowledge and passion for tax planning with clients and other professionals. She is a frequent speaker at bar association and estate planning council events, and has authored many articles discussing tax planning techniques and compliance issues.

Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.