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 This does not eliminate the income tax, but a related provision will eliminate the income tax if the withdrawn amount is re-contributed within 3 years.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.