Natural Disaster Tax Relief Act of 2023

The Natural Disaster Tax Relief Act of 2023 provides tax relief to individuals living in areas where a major disaster was declared in 2023 (during the incident period of that disaster). It allows penalty-free withdrawals of up to $100,000 from retirement plans without the usual 10% early withdrawal tax, with the option to repay the funds within three years to avoid income tax. The bill also increases the maximum loan amount from retirement plans to $100,000 (from $50,000) and delays loan repayments for disaster victims. Additionally, it adjusts casualty loss deductions to make them more accessible by raising the deductible threshold and adding the loss amount to the standard deduction.