New Jersey, New York and Connecticut lawmakers are proposing a package of tax breaks for victims of Superstorm Sandy.

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The Hurricane Sandy Tax Relief Act of 2012, modeled after a similar bill passed into law in the wake of Hurricane Katrina, is aimed at providing tax relief for victims of Hurricane Sandy in areas designated as Federal Disaster Areas by the President.

"As we continue to rebuild in the wake of one of the worst natural disasters to hit our region in generations, we must ensure that our communities have the resources they need to begin to put their lives together," said Reps. Crowley, DeLauro, Grimm, Larson, LoBiondo, Pascrell, Rangel, Runyan and Smith. "This bill is a crucial first step in bringing much needed tax relief to help families, communities and business in our region get back on track. We urge our colleagues on both sides of the aisle to support this legislation to help in rebuilding the lives that have been devastated by this historic storm."

The Hurricane Sandy Tax Relief Act of 2012 is sponsored by Rep. Pascrell Bill Pascrell, Jr. (D-NJ) and co-sponsored by Reps. Charles B. Rangel (D-NY), Chris Smith (R-NJ), Frank Pallone (D-NJ), Rosa DeLauro (D-CT), Frank LoBiondo (R-NJ), Rodney Frelinghuysen (R-NJ), Joe Crowley (D-NY), Jon Larson (D-CT), Scott Garrett (R-NJ), Lenard Lance (R-NJ), Michael Grimm (R-NY) and Jon Runyan (R-NJ).

"We are looking to fill in the gaps where the emergency supplemental bill won't help, big ticket items that FEMA and the Army Corps of Engineers won't cover," said Congressman LoBiondo. "It's about moving quickly before the end of the session to get homeowners, businesses and communities back on their feet," he added.

The legislation will compliment the federal governments relief and recovery efforts by providing additional tax relief to businesses, individuals and municipalities affected by Hurricane Sandy, including:

Individual Assistance

  • Waiver of Adjusted Gross Income limitation for theft/loss deduction, so individuals can deduct the cost of uninsured losses, and increase the standard deduction for those who do not itemize their tax returns.
  • Increase the limitation on charitable contributions for disaster relief.
  • Look-back Provision for Child Tax Credit and Earned Income Tax Credit, to allow a family in the affected region to opt to use their previous year's earnings to calculate their Child Tax Credit and Earned Income Tax Credit.

Business Assistance

  • Allowing businesses to expense the cost of disaster recovery.
  • Allowing businesses to use Net Operating Loss to recover past tax payments or reduce future tax payments, if they are operating with no tax liability during the prescribed period.
  • Waiver of certain mortgage revenue bond requirements, easing access to capital.
  • Increase in new markets tax credit for investments in community development entities serving Hurricane Sandy disaster areas.
  • Allowing public utilities to reduce their tax liability when rebuilding or replacing assets damaged in the storm.
  • Work Opportunity Tax Credits for displaced workers.

Public and Municipal Assistance

  • New authority for affected states to issue state and local, and private activity bonds, modeled after GO Zone bonds issued after Hurricane Katrina, to help rebuild infrastructure, utilities and public buildings destroyed by the storm.

Housing Assistance

  • Increased allocation of the Low Income Housing Tax Credit for declared disaster areas.