Disaster RELIEF Act

To provide with respect to recent disasters an employee retention credit for employers affected by such disasters and rules for disaster-related personal casualty losses. 1. Short title This Act may be cited as the Disaster Recovery for Economies, Local Individuals, Employers, and Families Act of 2020 Disaster RELIEF Act 2. Definitions For purposes of this Act— (1) Qualified disaster area (A) In general The term qualified disaster area (B) COVID-19 Such term shall not include any area with respect to which such a major disaster has been so declared only by reason of COVID-19. (2) Qualified disaster zone The term qualified disaster zone (3) Qualified disaster The term qualified disaster (4) Incident period The term incident period 3. Employee retention credit for employers affected by qualified disasters (a) In general For purposes of section 38 (b) Definitions For purposes of this section— (1) Eligible employer The term eligible employer (A) which conducted an active trade or business in a qualified disaster zone at any time during the incident period of the qualified disaster with respect to such qualified disaster zone, and (B) with respect to whom the trade or business described in subparagraph (A) is inoperable at any time during the period beginning on the first day of the incident period of such qualified disaster and ending on the date of the enactment of this Act, as a result of damage sustained by reason of such qualified disaster. (2) Eligible employee The term eligible employee (3) Qualified wages The term qualified wages section 51(c)(1) (A) the date on which such trade or business has resumed significant operations at such principal place of employment, or (B) the date which 150 days after the last day of the incident period of the qualified disaster referred to in paragraph (1). Such term shall include wages paid without regard to whether the employee performs no services, performs services at a different place of employment than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed. Such term shall not include any wages taken into account under section 2301 of the Coronavirus Aid, Relief, and Economic Security Act. (c) Special rules (1) Employee not taken into account more than once An employee shall not be treated as an eligible employee for purposes of this subsection for any period with respect to any employer if such employer is allowed a credit under section 51 (2) Denial of double benefit Any wages taken into account in determining the credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986. (3) Certain other rules to apply For purposes of this subsection, rules similar to the rules of sections 51(i)(1), 52, and 280C(a), of the Internal Revenue Code of 1986, shall apply. (d) Election To not take certain wages into account (1) In general This section shall not apply to qualified wages paid by an eligible employer with respect to which such employer makes an election (at such time and in such manner as the Secretary may prescribe) to have this section not apply to such wages. (2) Coordination with paycheck protection program The Secretary, in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that payroll costs paid or incurred during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 1106(g) of the CARES Act. Terms used in the preceding sentence which are also used in section 1106 of such Act shall have the same meaning as when used in such section. (e) Amendment to paycheck protection program Section 1106(a)(8) of the CARES Act is amended by inserting , except that such costs shall not include qualified wages taken into account in determining the credit allowed under section 4 of the Disaster RELIEF Act 4. Special rules for qualified disaster-related personal casualty losses (a) In general If an individual has a net disaster loss for any taxable year— (1) the amount determined under section 165(h)(2)(A)(ii) (A) such net disaster loss, and (B) so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in subparagraph (A) of this paragraph) as exceeds 10 percent of the adjusted gross income of the individual, (2) in the case of qualified disaster-related personal casualty losses, section 165(h)(1) of such Code shall be applied to by substituting $500 $500 ($100 for taxable years beginning after December 31, 2009) (3) the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss, and (4) section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under paragraph (3) of this paragraph. (b) Net disaster loss For purposes of this section, the term net disaster loss section 165(h)(3)(A) (c) Qualified disaster-Related personal casualty losses For purposes of this section, the term qualified disaster-related personal casualty losses section 165(c)(3)

Summary: Disaster Recovery for Economies, Local Individuals, Employers, and Families Act of 2020 or the Disaster RELIEF Act This bill provides tax relief measures for individual and business taxpayers in qualified disaster areas during a specified period, other than areas for which a disaster has been declared solely by reason of COVID-19 (i.e., coronavirus disease 2019). Specifically, the bill provides employers in a disaster area a tax credit designed to retain employees by allowing a credit for 40% of their employee wages, not exceeding $6,000 for each employee. It also allows an enhanced tax deduction for personal casualty losses incurred in a disaster area.