As Congress moves forward toward an agreement on a final version of a bipartisan and bicameral retirement package, the American Institute of CPAs (AICPA) is urging Members of Congress in a letter to include an important disaster relief provision that is part of the Senate version of the bill, Enhancing American Retirement Now (EARN) Act.
This modified version of the AICPA-endorsed Disaster Retirement Savings Act would allow individuals affected by natural disasters to withdraw up to $22,000 from qualified retirement accounts without being assessed early-withdrawal penalties and fees.
The provision would permanently remove these penalties for individuals impacted by natural disasters who choose to use retirement funds to cover unexpected expenses associated with those disasters.
As it has been seen of late, we can experience a variety of natural disasters such as hurricanes, floods, tornadoes and wildfires at all times of the year. AICPA believes that fair and reliable tax assistance for disaster victims is needed during these times, and the related provision in the EARN Act would provide significant relief to victims of natural disasters.
AICPA VP of Taxation, Edward Karl, CPA, CGMA, says disasters can have a devastating impact on families and businesses and we must do everything we can to reduce the stress and burden of rebuilding after a disaster. “Taxpayers should be allowed to use their own funds, without penalty, to help restore their lives and businesses while they wait for government assistance and insurance reimbursements.”
AICPA lauded the work of Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA), and Representatives Mike Thompson (D-CA) and Mike Kelly (R-PA) for their support of the Disaster Retirement Savings Act.
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