The Hurricane Helene and Milton Tax Relief Act of 2025 provides essential tax relief, retirement fund access, and increased charitable deduction limits for individuals and businesses impacted by Hurricanes Helene and Milton.
Vern Buchanan
Representative
FL-16
The Hurricane Helene and Milton Tax Relief Act of 2025 provides essential financial support to individuals and businesses impacted by these storms. The bill allows eligible taxpayers to use prior-year income to calculate the Earned Income Tax Credit, increases deduction limits for hurricane-related charitable contributions, and provides penalty-free access to retirement funds. These measures are designed to ease the economic burden on those recovering from the disaster.
Hurricane Relief Bill Offers Tax Breaks and Penalty-Free Retirement Access for Helene and Milton Survivors
If you were in the path of Hurricane Helene or Milton, the government is looking to cut you some slack on your next tax return. This bill recognizes that when a storm wipes out your property or disrupts your job, the standard tax rules don’t really fit your reality. The main goal here is to keep more cash in your pocket by relaxing the rules on income reporting, charitable giving, and retirement accounts for those living in Presidentially declared disaster areas between September 28 and November 2, 2024.
A Safety Net for the EITC
For workers who rely on the Earned Income Tax Credit (EITC), a disaster-related job loss can be a double blow: you lose your paycheck, and then you lose your tax credit because your income dropped too low. Section 3 of this bill fixes that by letting you use your 2023 income to calculate your credit if your 2024 income took a hit. Think of it as a 'do-over' button—if you made $30,000 in 2023 but only $15,000 in 2024 because of the storms, you can use the higher number to qualify for a bigger credit. This ensures that a temporary disaster doesn't result in a permanent financial setback for families living paycheck to paycheck.
Tapping the Nest Egg Without the Sting
Usually, taking money out of your 401(k) or IRA before you’re 59½ comes with a painful 10% penalty, but Section 5 waives that for 'qualified hurricane disaster distributions.' If you suffered an economic loss, you can pull out up to $100,000 penalty-free through the end of 2025. You also get three years to pay the taxes on that withdrawal instead of owing it all at once, or you can choose to pay it back into your retirement account within three years to keep your savings intact. For those who were in the middle of buying a home but saw the deal fall through because of the storms, the bill even lets you put back hardship distributions you’d already taken out for the purchase.
Boosting the Power of Giving
To keep the relief funds flowing, the bill also changes the math for donors. Under Section 4, individuals can deduct cash donations for hurricane relief up to 100% of their adjusted gross income—essentially wiping out their tax bill if they give enough—while corporations see their deduction limit jump from 10% to 20% of taxable income. Even if you don’t itemize your deductions and just take the standard amount, you can still claim these specific disaster donations on top of it. Plus, if you’re feeling generous in early 2025, you can choose to treat those donations as if they happened on December 31, 2024, to get the tax benefit a full year sooner.