The Hurricane Helene and Milton Tax Relief Act of 2025 aims to provide targeted tax relief to individuals and areas impacted by Hurricanes Helene and Milton. It defines an eligible individual as someone whose principal abode was in a qualified hurricane disaster area during the incident period (September 28, 2024, to November 2, 2024) and who sustained economic loss due to these hurricanes. A qualified hurricane disaster area is one declared a major disaster by the President.

One key provision allows eligible individuals to elect to determine their earned income credit for the applicable taxable year based on their earned income from the preceding taxable year, if that amount is higher. This helps taxpayers whose income may have been reduced due to the hurricanes. This election applies to any taxable year that includes a portion of the incident period and is limited to a single use per taxpayer.

The bill also introduces increased limitations on charitable contributions made for qualified hurricane disaster relief. Individuals can deduct such contributions up to their entire contribution base, while corporations can deduct up to 20 percent of their taxable income, with excess amounts carried over for five years. Importantly, contributions made between January 1, 2025, and April 15, 2025, for disaster relief can be treated as if they were made on December 31, 2024, providing immediate tax benefits.

Furthermore, the Act provides special rules for the use of retirement funds. It allows for tax-favored withdrawals of up to $100,000 from eligible retirement plans without the usual 10% early withdrawal penalty, with the option to repay these distributions within three years. The income inclusion for these withdrawals can also be spread ratably over three taxable years. Additionally, the bill increases the maximum loan amount from qualified plans to $100,000 and allows for a one-year delay in repayments for existing loans for eligible individuals.