December 19, 2005 – The Gulf Opportunity Zone Act of 2005 (H.R. 4440), a bill to provide tax incentives for reinvestment in the hurricane-stricken Gulf Coast region, has been passed via a unanimous consent procedure by both House and Senate. It is now bound for President Bush’s desk for his expected signature.
This bill has significance not only for general reinvestment and stimulus to the Gulf economy, but for individuals affected by Hurricanes Rita and Wilma who have retirement assets. Assuming presidential signature, Hurricane Rita and Wilma victims who qualify will have relief previously made available only to victims of Hurricane Katrina by the Katrina Emergency Tax Relief Act of 2005 (KETRA). The relief provided in H.R. 4440 includes the following items.
Qualified hurricane distributions up to $100,000 may be exemption from early distribution penalty, and be given ratable taxation and the ability to be recontributed to an IRA or retirement plan.
Provides an enhanced plan loan provisions for increased amount and extended repayment.
Includes the KETRA retroactive plan amendment framework (amendment required no sooner than the end of 2007 plan years for nongovernmental plans).
Allows that certain distributions from qualified savings arrangements for home purchase may be recontributed if the residence is not purchased or built due to the hurricanes.
- Includes extended deadlines for filing tax returns and completing certain time-sensitive tax-related acts (e.g., completing rollovers, taking RMDs, etc., shall not end earlier than February 28, 2006).