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Hurricane Katrina tax relief.

Article Excerpt
On September 23, 2005, President Bush signed into law the Katrina Emergency Tax Relief Act of 2005 (H.R. 3768). This new legislation provides $6.11 billion in short-term tax relief to hurricane victims and taxpayers who provide assistance to them. Additional legislation to address long-term concerns is still anticipated.

Tax Breaks for Hurricane Victims

To help those affected by the storm, the new law provides several key provisions. Here are some of the provisions:

Additional time to act. While the IRS had initially granted more time for taxpayers to take certain actions, the new law provides a blanket extension through February 28, 2006, for filing tax returns, paying taxes or filing a claim for a credit or refund of tax. The suspension applies not only to income taxes, but also to all other federal taxes, including employment and excise taxes.

Retirement plan relief. The 10% early distribution penalty for those under age 59-1/2 who take withdrawals from qualified retirement plans and IRAs can be waived. The waiver is limited to withdrawals taken on or after August 25, 2005, and before January 1, 2005, for those with a principal place of abode on August...

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