The Natural Disaster Tax Relief Act of 2023 aims to provide financial assistance to individuals affected by major disasters in 2023. It allows penalty-free withdrawals from retirement accounts, lets people recontribute those funds for home purchases or construction, increases the limit on disaster-related retirement plan loans, and enhances the tax deduction for personal casualty losses.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
The Natural Disaster Tax Relief Act of 2023 aims to provide financial assistance to individuals affected by major disasters in 2023. It allows penalty-free withdrawals from retirement accounts, lets people recontribute those funds for home purchases or construction, increases the limit on disaster-related retirement plan loans, and enhances the tax deduction for personal casualty losses.
Last updated: 12/29/2025
Official Summary
Congressional Research Service summary
<p> <b>Natural Disaster Tax Relief Act of 2023</b></p> <p>This bill sets forth tax relief provisions for individual taxpayers for losses resulting from a major disaster occurring in 2023.</p> <p>Specifically, the bill</p> <ul> <li> allows penalty-free disaster-relief withdrawals from tax-exempt retirement plans up to $100,000, </li> <li>permits recontributions of such withdrawals for home purchases or construction cancelled due to the disaster,</li> <li> increases to $100,000 the limit on loans for disaster assistance from retirement plans, and </li> <li>enhances the tax deduction for disaster-related personal casualty losses.</li></ul>
Key Points
Main provisions of the bill
Allows penalty-free withdrawals of up to $100,000 from tax-exempt retirement plans for disaster relief
Permits recontributions of those withdrawals for cancelled home purchases or construction due to the disaster
Increases the limit on loans from retirement plans for disaster assistance to $100,000
Enhances the tax deduction for disaster-related personal casualty losses
How This Impacts Americans
Potential effects on citizens and communities
This bill would directly benefit individuals whose homes, businesses, or communities were impacted by major disasters in 2023. It would give them easier access to their retirement savings and more financial flexibility to recover and rebuild.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
3043, 119th Congress (2025). "Military and Federal Employee Protection Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-3043
