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.