September 18, 2020 – 2020 Disasters Tax Relief Act / Disaster Tax Relief Act of 2020
A pair of competing Senate proposals to provide tax relief for victims of natural disasters (aside from the COVID-19 pandemic) were introduced this week.
Senators Dianne Feinstein and Kamala D. Harris (both D-Calif.), Ron Wyden (D-Ore.), Jeff Merkley (D-Ore.) and Patty Murray (D-Wash.) introduced the “2020 Disasters Tax Relief Act,” while Senate Finance Committee Chairman Chuck Grassley (R-Iowa), Joni Ernst (R-Iowa), Dianne Feinstein (D-Calif), Bill Cassidy (R-La.) and John Kennedy (R-La.) introduced the “Disaster Tax Relief Act of 2020.” Interestingly, Sen. Feinstein is listed as an author on both bills. The bills are meant to assist individuals and businesses affected by recent wildfires and weather related disasters.
The two proposals are very similar and are closely modeled on similar legislation which has been implemented in the past. A similar provision was passed in December 2019.
The most significant difference between the two proposals is that Chairman Grassley’s version only covers disaster declared on or after July 1, 2020 while the competing proposal includes all disaster declared in 2020 except those related to COVID-19. Both proposals include an employee retention tax credit, a staple of disaster relief tax legislation going back to Hurricane Katrina in 2005. Chairman Grassley’s version also includes new language to handle some interaction with the CARES Act.
Experts suggest that a version of this bill is most likely to be dealt with after the election and could be combined with consideration of other expiring tax provisions known as “extenders.”