Income tax return filing season is approaching and Hurricane Harvey survivors will be able to take advantage of several tax breaks.
The Hurricane Tax Relief Bill was signed into law in late 2017. It didn't get a lot of attention at the time, but it will help people directly affected by hurricanes, as long as they know how to take advantage of it.
At a news conference at Houston City Hall on Friday, U.S. Senator Ted Cruz laid out several ways that individuals and small businesses can benefit from the bill.
“The Hurricane Tax Relief Bill is targeted for those who were impacted by Hurricane Harvey or Hurricane Irma or Hurricane Maria,” said Sen. Cruz, who co-sponsored the legislation. He also said it will benefit millions of people in Texas and especially in Houston area, in four critical ways.
“Number one, if your home was damaged in the storm, and you have property casualty losses from the damage, under this tax relief legislation that passed, you can deduct those damages on your taxes,” said Sen. Cruz. He explained that it would add up to billions of dollars in tax savings for hurricane survivors.
Secondly, the Hurricane Tax Relief Bill allows hurricane survivors to dip into their retirement savings and use it to rebuild without penalty.
Thirdly, the legislation removes the charitable giving deduction limit for anyone who gives to charities that focus on hurricane relief.
Finally, the bill helps businesses hit hard by the hurricane.
“The employers did the right thing," said Sen. Cruz. "They made the right decision to keep the paychecks coming. Look, the employees may have had their living room under water, but the business was under water too.”
Three Brothers Bakery is one of the businesses that will qualify for a 40 percent deduction in employee payroll taxes for the part of 2017 following Hurricane Harvey.
“I’ll take every deduction we can get, because this disaster more than any other one has been really hard to recover from,” said Janice Jucker, co-owner of Three Brothers Bakery.
The business closed for 17 days after the hurricane and struggled with a smaller revenue for the rest of 2017.
“You have to be able to pay your team, right, to get back up and running," said Jucker. "If you don’t have the money to pay your team, then you’re not gonna get back up and running.”
Congress has also passed two waves of disaster relief funding so far. Sen. Cruz talked on Friday about the third and biggest wave of funding being negotiated in Congress now, and Houston Mayor Sylvester Turner added that he is hoping for another wave after that to help get southeast Texas back on its feet.