Homeowner Disaster Relief Act of 2014

To amend the Internal Revenue Code of 1986 to waive the 10-percent penalty on qualified natural disaster distributions from qualified retirement plans. 1. Short title This Act may be cited as the Homeowner Disaster Relief Act of 2014 2. Waiver of 10-percent penalty on qualified natural disaster distributions from qualified retirement plans (a) In general Section 72(t)(2) (H) Qualified natural disaster distributions (i) In general Any qualified natural disaster distribution. (ii) Cross reference For definitions and rules related to qualified natural disaster distributions, see paragraph (11). . (b) Definitions and special rules Section 72(t) of such Code is amended by adding at the end the following new paragraph: (11) Qualified natural disaster distributions (A) In general Except as provided in subparagraph (B), the term qualified natural disaster distribution (i) such individual sustained an economic loss by reason of a federally declared disaster, (ii) the principal place of abode of such individual on the disaster declaration date is in the disaster area, and (iii) such distribution is made during the 1-year period beginning on the disaster declaration date. (B) Aggregate dollar limitation (i) In general The aggregate amount of distributions received by an individual which may be treated as qualified natural disaster distributions for any taxable year with respect to any federally declared disaster shall not exceed the excess (if any) of— (I) $100,000, over (II) the aggregate amounts treated as qualified natural disaster distributions with respect to such federally declared disaster received by such individual for all prior taxable years. (ii) Treatment of plan distributions If a distribution to an individual would (without regard to clause (i)) be a qualified natural disaster distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified natural disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000. (iii) Controlled group For purposes of clause (ii), the term controlled group (C) Amount distributed may be repaid Any individual who receives a qualified natural disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions to an individual retirement plan of such individual in an aggregate amount not to exceed the amount of such distribution. The dollar limitations otherwise applicable to contributions to individual retirement plans shall not apply to any contribution made pursuant to the preceding sentence. No deduction shall be allowed for any contribution pursuant to this subparagraph. (D) Federally declared disaster For purposes of this paragraph— (i) In general The term federally declared disaster (ii) Disaster area The term disaster area (iii) Disaster declaration date The term disaster declaration date . (c) Effective date The amendments made by this section shall apply to distributions made after the date of the enactment of this Act.

Summary: Homeowner Disaster Relief Act of 2014 - Amends the Internal Revenue Code to exempt any qualified natural disaster distribution from the 10% penalty on premature distributions from tax-exempt retirement plans. Defines "qualified natural diasaster distribution" as a distribution from a retirement plan to an individual if: (1) such individual sustained an economic loss due to a federally-declared disaster, (2) the principal place of abode of such individual on the disaster declaration date is in the disaster area, and (3) such distribution is made during the one-year period beginning on the disaster declaration date.