Congress Passes Katrina Tax Breaks
$6.1 Billion Aid Package For Hurricane Victims Sent To President
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Play CBS Video Video Political Storm Katrina A political storm is brewing over Katrina's $200 billion cost, and one big-name Republican wants to sacrifice a major Medicare benefit to help pay for the recovery efforts. Gloria Borger reports.
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Video FEMA Tries Again Federal officials don't want to make comparisons with Katrina, but one change in FEMA's response to Rita is obvious: the military is front and center. Randall Pinkston reports on the preparations.
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Video Galveston Now A Ghost Town Galveston, Texas, is quickly evacuating ahead of Rita's imminent arrival. John Blackstone reports on the vulnerable town as it looks back to Katrina - and a hurricane more than 100 years ago.
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Special Report Gulf Coast Disaster Complete coverage of the effects of Hurricane Katrina on the Gulf Coast, including anniversary coverage.
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News Tools How To Help Organizations you may contact to give aid to the victims of Hurricane Katrina.
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Interactive Katrina's Cost Here's a state-by-state look at the big storm's calamitous wake.
The tax breaks passed Wednesday waive penalties for hurricane victims who need cash for expenses and recovery and want to use money stashed in protected retirement accounts like IRAs. The Treasury Department had already ruled the storm qualified as a hardship and permitted early withdrawals of retirement funds.
Also under the bill, families that rely on the child tax credit and the earned income tax credit could protect those benefits throughout job losses, residency changes and family separations caused by Hurricane Katrina. Those disruptions could mean that some would not qualify for the family tax breaks this year, but the bill lets taxpayers use 2004 information to calculate the credits.
Other assistance lets taxpayers recoup more of their unreimbursed and uninsured losses, and waives taxes imposed when debts, such as mortgages, are forgiven.
Two tax credits encourage Gulf Coast businesses hit by the storm to keep going. One offsets wages paid to employees hired in the region over the next two years. Another helps small businesses hurt by the storm who continue paying their employees through the end of the year.
Most of the tax help is directed specifically at those hit by Hurricane Katrina and would not necessarily apply in other regions hit by hurricanes before the end of the storm season.
The House also approved a measure that would assure that legal immigrants don't lose their status as a result of the disaster. Congress provided similar protections in the Patriot Act passed after the Sept. 11, 2001, attacks.
The bill allows spouses and children of citizens and legal permanent residents who died in the hurricane to continue their immigration petitions, expedites procedures to replace lost green cards or other work authorization documents, allows employers to hire aliens while they are replacing lost documents, and allows aliens on student visas at hurricane-closed schools to transfer to other schools.
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