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S.F. No. 2523 - Federal update for disaster relief provisions
 
Author: Senator Melisa Franzen
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: March 20, 2018



 

This bill updates the Internal Revenue Code (IRC) reference in Minnesota Statutes to conform to the provisions in the Disaster Tax Relief and Airport and Airway Extension Act of 2017, Public Law 115-63, enacted September 29, 2017. The federal bill contained three items related to the calculation of taxable income for tax year 2017, in response to Hurricanes Harvey, Irma, or Maria:

  • Exempts withdrawals up to $100,000 from retirement savings accounts that were due to sustained damages from the 10% penalty that is normally assessed, and allows repayment to the account or inclusion of the distribution in income over three years;
  • Suspends the floor on the deduction for casualty losses, which generally may be deducted only to the extent they exceed 10% of AGI and is limited to filers who itemize. The provision allows the entire amount of losses to be deducted and allows filers who claim the standard deduction to claim the casualty loss deduction; and
  • Suspends the charitable contribution limit for 2017 contributions made for hurricane disaster relief. Generally, 50% of charitable contributions are allowed to be deducted.

Section 1. Internal Revenue Code. Updates the reference to the IRC in the administrative provisions for the tax statutes.

Section 2. Net income. Updates the reference to the IRC for purposes of the definition of net income.

Section 3. Internal Revenue Code. Updates the reference to the IRC for purposes of its reference throughout the income tax chapter.

Section 4. Internal Revenue Code. Updates the reference to the IRC in the property tax refund chapter.

 
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