Note: The below letter was sent to several representatives and senators individually.
Nov. 19, 2024
The Honorable Rob Wittman
United States House of Representatives
Washington, DC 20515
RE: Urgent Federal Tax Relief for Victims of Natural Disasters
Dear Representative Wittman:
On behalf of the nearly 12,000 members of the Virginia Society of CPAs (VSCPA), we are compelled to reach out to you regarding the devastating impact of Hurricane Helene on our communities, particularly in Southwest Virginia. The impacts of this disaster have been monumental, as evidenced by the destruction faced by the Virginia Creeper Trail, and the critical tourism-driven economy of Damascus, which has been essentially crippled. The situation is dire — 17 trestles along a vital recreational route have been severely damaged or destroyed, leaving small businesses and local families in a state of uncertainty and desperation.
In the Claytor Lake area, homeowners have witnessed floodwaters rise alarmingly, inundating homes elevated significantly above sea level. Many of these homeowners did not secure flood insurance, leaving them vulnerable and exposed. Lower-income taxpayers often cannot fully benefit from disaster losses under current federal and state tax returns, especially as many do not itemize. This is a systemic issue that needs immediate attention and action.
These are just a few examples of what Virginians are facing. As you prepare to pass a disaster supplemental appropriations bill, the VSCPA urges you to take bold steps to include targeted tax relief provisions that can meaningfully assist the Commonwealth’s affected communities. Specifically, the following measures would provide critical support:
- Enhanced Casualty Loss Deduction: For tax years 2018 through 2025, the casualty loss deduction — a permanent disaster tax relief provision — is limited to losses attributable to federally declared disasters. Only losses in excess of $100 are deductible for each casualty and casualty losses are only deductible to the extent that total losses exceed 10% of the taxpayer’s adjusted gross income. Increasing the $100 floor for each casualty, waiving the 10% of AGI floor, and allowing taxpayers who do not itemize deductions to add the deduction to their standard deduction would be extremely helpful for those Virginia taxpayers who have suffered so much.
- Earned Income Tax Credit / Child Tax Credit Computation Look-Back: Approximately 512,000 Virginia taxpayers qualify for the EITC or CTC. Given that agricultural and forestry-related jobs have suffered immensely, permitting taxpayers to utilize their previous year’s income to compute their credits would provide significant relief and stabilize impacted households during this challenging time.
- Extending Amount of Time to File a Tax Refund or Credit: While the IRS has offered extended deadlines for filing and payments, the cutoffs for claiming refunds and credits remain unchanged, often disadvantaging disaster victims. Legislative action to permanently adjust these deadlines would benefit all future natural disaster victims and create a more equitable tax process.
In addition to these critical recommendations, the American Institute of CPAs (AICPA) has laid out 14 disaster tax relief recommendations aimed at reducing the burdens faced by disaster victims. Implementing these recommendations would facilitate a more efficient recovery process, allowing communities to rebuild and thrive once more.
The VSCPA is committed to elevating the success of all CPAs in Virginia, and we believe that meaningful policy changes can bring immediate aid and long-term benefits to our communities ravaged by natural disasters. We appreciate your attention to this pressing matter, as it affects thousands of lives across Virginia.
Thank you for your consideration. We stand ready to support you in delivering essential relief to the victims of recent natural disasters. Should you require further assistance or information, please do not hesitate to contact me or VSCPA Vice President of Advocacy & Pipeline, Emily Walker, CAE, at (804) 612-9428 or [email protected].
Sincerely,
Stephanie R. Peters, CAE
President & CEO
Virginia Society of CPAs