Included in the Consolidated Appropriations Act of 2021 was the Taxpayer Certainty and Disaster Relief Act TCDTRA of 2020  which has a number of relief provisions for victims in Presidentially Declared Disaster areas that were declared from 1/1/20 to 2/25/21. The provisions include:

  • Penalty-free retirement plan disaster distributions of up to $100,000 (can be recognized ratably over three years and recontributed within three years). A disaster plan distribution is one to an individual who lives within qualified disaster area who sustained economic loss by reason of the qualified disaster.
  • Recontributions of retirement plan withdrawals made for home purchases that couldn’t be completed due to disaster.
  • Increased loan limits for employer retirement plans that authorize loans.
  • Employee Retention Credit of 40% of $6000 of qualifying wages which equates to a credit of $2,400 per employee for employers impacted by the disaster.
  • Corporations make make a qualified disaster relief contribution up to 100% of taxable income.
  • Low-income housing tax credit expansion
  • For personal casualty losses, you may deduct the loss subject to $500 per casualty floor and you can increase your standard deduction by the loss amount. This means that the loss is not subject to the $100/10% AGI threshold and you do not have to itemize to take it. (This is similar to the treatment received for 2017 Hurricanes and 2017 CA wildfires).

CA may not conform to all of these provisions.