Those affected by the Aug. 10 derecho and other disasters may receive tax relief following the passing of the federal Disaster Tax Relief Act of 2020 last week.
Businesses and individuals in any presidentially declared disaster area after July 1 are eligible for the relief.
Relief measures include a business tax credit for employee retention, a suspension of the limit on tax deductions for “certain contributions” to charities in affected areas and a rule allowing low-income workers to claim tax credits using their previous year’s income, according to a news release from Sen. Joni Ernst’s office.
The business tax credit covers 40 percent of wages, up to $6,000 per employee, according to the Senate bill.
It also takes away penalties for early retirement account withdrawals “to cover the cost of certain storm-related expenses” and creates “special rules” for personal casualty losses.
Ernst, a Republican, sponsored the legislation in the Senate. Republican Sen. Chuck Grassley was a co-sponsor in the Senate, and Democratic Rep. Abby Finkenauer was a co-sponsor in the House.
“As Iowans continue to recover from the devastating derecho that swept across our state in the summer, this new law will remove burdensome taxes and penalties and provide Iowa families, communities and businesses more relief and support during these challenging times,” Ernst said in the news release Monday.
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