I 
118TH CONGRESS 
1ST SESSION H. R. 5873 
To provide special rules for retirement accounts and personal casualty losses 
with respect to certain major disasters occurring in 2023. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 2, 2023 
Ms. TOKUDA (for herself and Mr. CASE) introduced the following bill; which 
was referred to the Committee on Ways and Means 
A BILL 
To provide special rules for retirement accounts and personal 
casualty losses with respect to certain major disasters 
occurring in 2023. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Natural Disaster Tax 
Relief Act of 2023’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act— 
(1) QUALIFIED
DISASTER
AREA.—The term 
‘‘qualified disaster area’’ means any area with re-
spect to which a major disaster was declared, during 
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calendar year 2023, by the President under section 
401 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act if the incident period of 
the disaster with respect to which such declaration 
is made begins during calendar year 2023. 
(2) QUALIFIED
DISASTER.—The term ‘‘quali-
fied disaster’’ means, with respect to any qualified 
disaster area, the disaster by reason of which a 
major disaster was declared with respect to such 
area. 
(3) INCIDENT PERIOD.—The term ‘‘incident pe-
riod’’ means, with respect to any qualified disaster, 
the period specified by the Federal Emergency Man-
agement Agency as the period during which such 
disaster occurred (except that for purposes of this 
Act such period shall not be treated as ending after 
January 31, 2024). 
SEC. 3. SPECIAL DISASTER-RELATED RULES FOR USE OF 
RETIREMENT FUNDS. 
(a) TAX-FAVORED WITHDRAWALS FROM RETIRE-
MENT PLANS.— 
(1) IN GENERAL.—Section 72(t) of the Internal 
Revenue Code of 1986 shall not apply to any quali-
fied disaster distribution. 
(2) AGGREGATE DOLLAR LIMITATION.— 
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(A) IN GENERAL.—For purposes of this 
subsection, the aggregate amount of distribu-
tions received by an individual which may be 
treated as qualified disaster distributions for 
any taxable year shall not exceed the excess (if 
any) of— 
(i) $100,000, over 
(ii) the aggregate amounts treated as 
qualified disaster distributions received by 
such individual for all prior taxable years. 
(B) TREATMENT
OF
PLAN
DISTRIBU-
TIONS.—If a distribution to an individual would 
(without regard to subparagraph (A)) be a 
qualified disaster distribution, a plan shall not 
be treated as violating any requirement of the 
Internal Revenue Code of 1986 merely because 
the plan treats such distribution as a qualified 
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 em-
ployer) to such individual exceeds $100,000. 
(C) CONTROLLED GROUP.—For purposes 
of subparagraph (B), the term ‘‘controlled 
group’’ means any group treated as a single 
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employer under subsection (b), (c), (m), or (o) 
of section 414 of the Internal Revenue Code of 
1986. 
(D) SPECIAL RULE FOR INDIVIDUALS AF-
FECTED BY MORE THAN ONE DISASTER.—The 
limitation of subparagraph (A) shall be applied 
separately with respect to distributions made 
with respect to each qualified disaster. 
(3) AMOUNT DISTRIBUTED MAY BE REPAID.— 
(A) IN GENERAL.—Any individual who re-
ceives a qualified disaster distribution may, at 
any time during the 3-year period beginning on 
the day after the date on which such distribu-
tion was received, make 1 or more contributions 
in an aggregate amount not to exceed the 
amount of such distribution to an eligible retire-
ment plan of which such individual is a bene-
ficiary and to which a rollover contribution of 
such distribution could be made under section 
402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 
457(e)(16), of the Internal Revenue Code of 
1986, as the case may be. 
(B) TREATMENT OF REPAYMENTS OF DIS-
TRIBUTIONS
FROM
ELIGIBLE
RETIREMENT 
PLANS
OTHER
THAN
IRAS.—For purposes of 
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the Internal Revenue Code of 1986, if a con-
tribution is made pursuant to subparagraph (A) 
with respect to a qualified disaster distribution 
from an eligible retirement plan other than an 
individual retirement plan, then the taxpayer 
shall, to the extent of the amount of the con-
tribution, be treated as having received the 
qualified disaster distribution in an eligible roll-
over 
distribution 
(as 
defined 
in 
section 
402(c)(4) of such Code) and as having trans-
ferred the amount to the eligible retirement 
plan in a direct trustee to trustee transfer with-
in 60 days of the distribution. 
(C) TREATMENT OF REPAYMENTS OF DIS-
TRIBUTIONS FROM IRAS.—For purposes of the 
Internal Revenue Code of 1986, if a contribu-
tion is made pursuant to subparagraph (A) 
with respect to a qualified disaster distribution 
from an individual retirement plan (as defined 
by section 7701(a)(37) of such Code), then, to 
the extent of the amount of the contribution, 
the qualified disaster distribution shall be treat-
ed as a distribution described in section 
408(d)(3) of such Code and as having been 
transferred to the eligible retirement plan in a 
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direct trustee to trustee transfer within 60 days 
of the distribution. 
(4) DEFINITIONS.—For purposes of this sub-
section— 
(A) 
QUALIFIED
DISASTER
DISTRIBU-
TION.—Except as provided in paragraph (2), 
the term ‘‘qualified disaster distribution’’ means 
any distribution from an eligible retirement 
plan made— 
(i) on or after the first day of the in-
cident period of a qualified disaster and 
before July 1, 2024, and 
(ii) to an individual whose principal 
place of abode at any time during the inci-
dent period of such qualified disaster is lo-
cated in the qualified disaster area with re-
spect to such qualified disaster and who 
has sustained an economic loss by reason 
of such qualified disaster. 
(B) ELIGIBLE
RETIREMENT
PLAN.—The 
term ‘‘eligible retirement plan’’ shall have the 
meaning 
given 
such 
term 
by 
section 
402(c)(8)(B) of the Internal Revenue Code of 
1986. 
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(5) INCOME INCLUSION SPREAD OVER 3-YEAR 
PERIOD.— 
(A) IN
GENERAL.—In the case of any 
qualified disaster distribution, unless the tax-
payer elects not to have this paragraph apply 
for any taxable year, any amount required to be 
included in gross income for such taxable year 
shall be so included ratably over the 3-taxable- 
year period beginning with such taxable year. 
(B) SPECIAL RULE.—For purposes of sub-
paragraph (A), rules similar to the rules of sub-
paragraph (E) of section 408A(d)(3) of the In-
ternal Revenue Code of 1986 shall apply. 
(6) SPECIAL RULES.— 
(A) EXEMPTION OF DISTRIBUTIONS FROM 
TRUSTEE TO TRUSTEE TRANSFER AND WITH-
HOLDING
RULES.—For purposes of sections 
401(a)(31), 402(f), and 3405 of the Internal 
Revenue Code of 1986, qualified disaster dis-
tributions shall not be treated as eligible roll-
over distributions. 
(B) QUALIFIED DISASTER DISTRIBUTIONS 
TREATED AS MEETING PLAN DISTRIBUTION RE-
QUIREMENTS.—For purposes of the Internal 
Revenue Code of 1986, a qualified disaster dis-
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tribution shall be treated as meeting the re-
quirements 
of 
sections 
401(k)(2)(B)(i), 
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) 
of such Code and section 8433(h)(1) of title 5, 
United States Code, and, in the case of a 
money purchase pension plan, a qualified dis-
aster distribution which is an in-service with-
drawal shall be treated as meeting the distribu-
tion rules of section 401(a) of such Code. 
(b) RECONTRIBUTIONS
OF
WITHDRAWALS
FOR 
HOME PURCHASES.— 
(1) RECONTRIBUTIONS.— 
(A) IN GENERAL.—Any individual who re-
ceived a qualified distribution may, during the 
applicable period, make 1 or more contributions 
in an aggregate amount not to exceed the 
amount of such qualified distribution to an eli-
gible retirement plan (as defined in section 
402(c)(8)(B) of the Internal Revenue Code of 
1986) of which such individual is a beneficiary 
and to which a rollover contribution of such dis-
tribution could be made under section 402(c), 
403(a)(4), 403(b)(8), or 408(d)(3), of such 
Code, as the case may be. 
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(B) TREATMENT OF REPAYMENTS.—Rules 
similar to the rules of subparagraphs (B) and 
(C) of subsection (a)(3) shall apply for purposes 
of this subsection. 
(2) QUALIFIED DISTRIBUTION.—For purposes 
of this subsection, the term ‘‘qualified distribution’’ 
means any distribution— 
(A) 
described 
in 
section 
401(k)(2)(B)(i)(IV), 
403(b)(7)(A)(i)(V), 
403(b)(11)(B), or 72(t)(2)(F), of the Internal 
Revenue Code of 1986, 
(B) which was to be used to purchase or 
construct a principal residence in a qualified 
disaster area, but which was not so used on ac-
count of the qualified disaster with respect to 
such area, and 
(C) which was received during the period 
beginning on the date which is 180 days before 
the first day of the incident period of such 
qualified disaster and ending on the date which 
is 30 days after the last day of such incident 
period. 
(3) APPLICABLE PERIOD.—For purposes of this 
subsection, the term ‘‘applicable period’’ means, in 
the case of a principal residence in a qualified dis-
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aster area with respect to any qualified disaster, the 
period beginning on the first day of the incident pe-
riod of such qualified disaster and ending on June 
30, 2024. 
(c) LOANS FROM QUALIFIED PLANS.— 
(1) INCREASE IN LIMIT ON LOANS NOT TREAT-
ED
AS
DISTRIBUTIONS.—In the case of any loan 
from a qualified employer plan (as defined under 
section 72(p)(4) of the Internal Revenue Code of 
1986) to a qualified individual made during the pe-
riod beginning on the date of the enactment of this 
Act and ending on June 30, 2024— 
(A) clause (i) of section 72(p)(2)(A) of 
such Code shall be applied by substituting ‘‘ 
$100,000’’ for ‘‘ $50,000’’, and 
(B) clause (ii) of such section shall be ap-
plied by substituting ‘‘the present value of the 
nonforfeitable accrued benefit of the employee 
under the plan’’ for ‘‘one-half of the present 
value of the nonforfeitable accrued benefit of 
the employee under the plan’’. 
(2) DELAY OF REPAYMENT.—In the case of a 
qualified individual (with respect to any qualified 
disaster) with an outstanding loan (on or after the 
first day of the incident period of such qualified dis-
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aster) from a qualified employer plan (as defined in 
section 72(p)(4) of the Internal Revenue Code of 
1986)— 
(A) if the due date pursuant to subpara-
graph (B) or (C) of section 72(p)(2) of such 
Code for any repayment with respect to such 
loan occurs during the period beginning on the 
first day of the incident period of such qualified 
disaster and ending on the date which is 180 
days after the last day of such incident period, 
such due date shall be delayed for 1 year (or, 
if later, until June 30, 2024), 
(B) any subsequent repayments with re-
spect to any such loan shall be appropriately 
adjusted to reflect the delay in the due date 
under subparagraph (A) and any interest accru-
ing during such delay, and 
(C) in determining the 5-year period and 
the term of a loan under subparagraph (B) or 
(C) of section 72(p)(2) of such Code, the period 
described in subparagraph (A) of this para-
graph shall be disregarded. 
(3) QUALIFIED INDIVIDUAL.—For purposes of 
this subsection, the term ‘‘qualified individual’’ 
means any individual— 
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(A) whose principal place of abode at any 
time during the incident period of any qualified 
disaster is located in the qualified disaster area 
with respect to such qualified disaster, and 
(B) who has sustained an economic loss by 
reason of such qualified disaster. 
(d) PROVISIONS
RELATING
TO
PLAN
AMEND-
MENTS.— 
(1) IN GENERAL.—If this subsection applies to 
any amendment to any plan or annuity contract, 
such plan or contract shall be treated as being oper-
ated in accordance with the terms of the plan during 
the period described in paragraph (2)(B)(i). 
(2) AMENDMENTS TO WHICH SUBSECTION AP-
PLIES.— 
(A) IN
GENERAL.—This subsection shall 
apply to any amendment to any plan or annuity 
contract which is made— 
(i) pursuant to any provision of this 
section, or pursuant to any regulation 
issued by the Secretary or the Secretary of 
Labor under any provision of this section, 
and 
(ii) on or before the last day of the 
first plan year beginning on or after Janu-
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ary 1, 2024, or such later date as the Sec-
retary may prescribe. 
In the case of a governmental plan (as defined 
in section 414(d) of the Internal Revenue Code 
of 1986), clause (ii) shall be applied by sub-
stituting the date which is 2 years after the 
date otherwise applied under clause (ii). 
(B) CONDITIONS.—This subsection shall 
not apply to any amendment unless— 
(i) during the period— 
(I) beginning on the date that 
this section or the regulation de-
scribed in subparagraph (A)(i) takes 
effect (or in the case of a plan or con-
tract amendment not required by this 
section or such regulation, the effec-
tive date specified by the plan), and 
(II) ending on the date described 
in subparagraph (A)(ii) (or, if earlier, 
the date the plan or contract amend-
ment is adopted), 
the plan or contract is operated as if such plan 
or contract amendment were in effect, and 
(ii) such plan or contract amendment 
applies retroactively for such period. 
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SEC. 4. SPECIAL RULES FOR QUALIFIED DISASTER-RE-
LATED 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) of the Internal Revenue Code of 
1986 shall be equal to the sum of— 
(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 clause (i) of this subparagraph) as 
exceeds 10 percent of the adjusted gross income 
of the individual, 
(2) in the case of qualified disaster-related per-
sonal casualty losses, section 165(h)(1) of such Code 
shall be applied to by substituting ‘‘$500’’ for ‘‘$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 at-
tributable to the increase under subparagraph (C) of 
this paragraph. 
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(b) NET DISASTER LOSS.—For purposes of this sub-
section, the term ‘‘net disaster loss’’ means the excess of 
qualified disaster-related personal casualty losses over per-
sonal casualty gains (as defined in section 165(h)(3)(A) 
of the Internal Revenue Code of 1986). 
(c) QUALIFIED DISASTER-RELATED PERSONAL CAS-
UALTY LOSSES.—For purposes of this subsection, the 
term ‘‘qualified disaster-related personal casualty losses’’ 
means losses described in section 165(c)(3) of the Internal 
Revenue Code of 1986 which arise in a qualified disaster 
area on or after the first day of the incident period of 
the qualified disaster to which such area relates, and 
which are attributable to such qualified disaster. 
Æ 
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