AICPA Urges Congress to Include Disaster Relief Provision in Bipartisan Retirement Bill

As Congress moves forward towards 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.

Our nation can experience a variety of natural disasters such as hurricanes, floods, tornadoes and wildfires at all times of the year. The 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.

"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," said AICPA VP of Taxation, Edward Karl, CPA, CGMA.

AICPA is particularly grateful to Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA) and Representatives Mike Thompson (D-CA) and Mike Kelly (R-PA) for their leadership and strong support of the Disaster Retirement Savings Act.

About the American Institute of CPAs

The American Institute of CPAs^® (AICPA^®) is the world's largest member association representing the CPA profession, with more than 421,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.

BACKGROUND:

• In October of 2021, AICPA expressed its strong support for the Disaster Retirement Savings Act (S. 2583), introduced by Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA). The bill would permanently remove penalties for individuals impacted by natural disasters who choose to use retirement funds to cover unexpected expenses associated with those disasters.
• In September of 2021, AICPA voiced strong support for the bipartisan Filing Relief for Natural Disasters Act, introduced by Senator Catherine Cortez Masto (D-NV).
• In June of 2021, AICPA expressed support for the bipartisan Filing Relief for Natural Disasters Act introduced by Representatives Judy Chu (D-CA) and John Katko (R-NY).
• In November of 2019, the AICPA commended Rep. Tom Rice (R-SC) in a letter for his continued efforts to provide permanent and consistent tax relief to individuals and businesses affected by natural disasters.
• In July of 2017, AICPA submitted disaster relief provisions in response to then-Senate Finance Committee Chair Orin Hatch's (UT-R) request for tax reform comments.
• In July of 2015, Representative Tom Reed (R-NY) introduced the National Tax Relief Disaster Act, which incorporated many of AICPA's proposals.
• In November of 2014, AICPA Tax Executive Committee then-Chair, Troy Lewis, testified before a Senate small business panel, explaining the impact that the current system is having on taxpayers and their advisers.
• In a 2013 letter to Members of Congress, the AICPA requested permanent tax provisions related to disaster relief.