Schumer, Menendez unveil proposed Sandy tax breaks

Owners of homes and businesses damaged by superstorm Sandy could deduct cleanup expenses and receive other tax breaks for 2012 under legislation proposed by Democratic Sens. Charles Schumer and Robert Menendez.

The bill's provisions were outlined in a news conference at Schumer's New York City offices Sunday. Some of the proposals would relate only to the Sandy aftermath, but others would apply to any disaster declared by the Federal Emergency Management Agency.

"We need a one-two punch to help people recover," Schumer, a New York Democrat, said at the news conference. Menendez represents New Jersey.

Under the proposal:

• Cleanup expenses like tree removal and flooding would be fully deductible for all 2012 FEMA disasters;

• People who live in the Sandy disaster area and who provide free housing for at least 60 consecutive days to people displaced by Sandy can claim exemptions worth $500 per person for up to four people;

• Victims of Sandy can take early withdrawals from retirement plans without incurring the 10 percent penalty tax otherwise imposed;

• Small businesses that continued to pay their employees' wages even if operations were closed because of Sandy would be eligible for a worker retention tax credit.

President Barack Obama asked Congress on Friday to appropriate $60.4 billion to help New York, New Jersey and other coastal states recover from the hurricane. That was short of the combined $82 billion in aid requested by officials in New York, New Jersey and Connecticut.