U.S. Rep. Mimi Walters (R-CA) on Nov. 14 sponsored the bipartisan California Wildfire Disaster Tax Relief Act of 2017 to help ease the financial impact of this year’s devastating wildfires on her state’s citizens.
Specifically, H.R. 4397 would eliminate both the current requirement that personal casualty losses must exceed 10 percent of adjusted gross income, and the requirement that only those who itemize deductions can claim personal casualty losses.
Additionally, the bill would suspend the limitation on charitable deductions related to qualified fire relief; end the 10 percent early withdrawal penalty for qualified fire relief distributions from retirement plans; and give taxpayers flexibility for taking retirement plan loans, among other provisions.
Walters said the 2017 wildfire season resulted in historic destruction throughout California, including her home district of Orange County. Overall, thousands of individuals and families were displaced, 43 people died, and numerous homes and businesses were destroyed, she said.
“These fires have taken an enormous financial and emotional toll on those affected,” Walters said. “This bill will help alleviate the financial burden for the thousands of Californians who are recovering from the wildfires.”
Walters’ California colleagues in the House commended her work.
U.S. House Majority Leader Kevin McCarthy (R-CA) praised her efforts on the bill and joined Walters in introducing it on Nov. 14.
“The fire damage our state and fellow Californians have faced this year is historically tragic,” McCarthy said. “The federal government should make harnessing those resources easier, especially in times of crisis.”
McCarthy said Walters’ “common sense solutions” will enable citizens to access their money without tax penalties and added that “the House is committed to removing unnecessary obstacles to a full recovery.”
U.S. Rep. Mike Thompson (D-CA) also joined Walters in introducing H.R. 4397, which he said will simplify how people claim tax deductions for the cost of destroyed property and provide them with penalty-free access to retirement funds.
At the same time, Thompson added that the bill also would give tax credits to disaster-affected employers for wages they’ve paid to employees from disaster areas.
“This is a great first step to help our community rebuild and I look forward to working with my House colleagues on longer-term relief for the communities hit by these fires.” Thompson said.