President Bush Signs Katrina Emergency Tax Relief Act of 2005 (KETRA)
On September 23, President Bush signed into law H.R. 3768, the "Katrina Emergency Tax Relief Act of 2005." KETRA features a number of provisions designed to provide relief to individuals and businesses recovering from Hurricane Katrina.
One provision will allow withdrawals of up to $100,000 from IRA's and qualified plans without the 10% pre-age 59 1/2 penalty. This does not eliminate the income tax, but a related provision will eliminate the income tax if the withdrawn amount is re-contributed within 3 years. If not, the income tax will be imposed based upon a three-year income averaging feature.
Individuals may claim a $500 exemption per evacuee for up to four people receiving rent-free housing in the taxpayer's home for at least 60 days.
Cash donations made after August 28, 2005 and before January 1, 2006 are exempt from the AGI phase-out.
These are just a few of the provisions. Download the KETRA bill.