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PSCA Executive Reports

September 18, 2019

Disaster Hardship Withdrawal Relief

Hurricanes Florence and Michael occurred nearly one year ago, but Congress has yet to authorize hardship withdrawal relief legislation that would allow affected Americans to access funds in their retirement accounts on a penalty-free basis. The disaster relief provisions appear to be caught up in a larger battle over tax extenders and their appropriateness as a tax policy tool. In June, the House Ways and Means Committee approved H.R. 3301, a bill that would extend various expiring tax provisions and provide disaster hardship withdrawal relief, among other disaster-related provisions, on a party-line vote, but House leadership has not shown an interest in taking up the bill. Senate Finance Committee Chairman Chuck Grassley (R-IA) and Senate Finance Committee Ranking Member Ron Wyden (D-OR) have introduced S. 617, their version of disaster-related and tax extenders legislation, and have said they are working behind the scenes to get buy-in. In August, Senator Grassley called tax extenders a “top priority” for Congress in September. At present, the most likely outcome is that disaster relief and tax extenders will be considered as part of must-pass appropriations legislation later this year.

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