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Did Sandy sap your savings?

State Assembly approves bill to help homeowners who used retirement funds to make repairs after 2012 hurricane

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A bill that would provide relief to homeowners who withdrew funds from retirement savings accounts in order to repair or rebuild their Hurricane Sandy-damaged homes was passed by the State Assembly last Friday, and is now awaiting a vote in the Senate.

“With many families still struggling financially, this legislation is crucial to address the fact that homeowners were forced to use and, in some cases deplete, their retirement savings to make repairs and move back home,” said Assemblyman Todd Kaminsky (D-Long Beach), who authored the bill. “This caused an increase in income tax for individuals and families [who were] already suffering, which was completely unfair.”

If approved, the legislation, dubbed the Bill to Reduce Sandy Victims’ Income Tax Burden, would allow homeowners to retroactively reduce their taxable incomes by the amount they withdrew. This would offset the tax penalty incurred by those who had to make the hard choice of using their retirement funds early.

John Korpeki, of East Rockaway, who dipped into his 401(k) to help pay for home repairs, said that if the legislation passes, it could have a big impact on homeowners who made the same decision he did. “I’m still skeptical,” he said. “After all that has gone on with Sandy, I’ll believe that relief is coming when it’s here. If this does help, though, that would be great. I was devastated to have to use my savings for repairs.”

“When you talk to people who suffered in Sandy, and people who had to liquidate their 401(k) accounts because they couldn’t find any other source for the money, it’s really sad,” said Kaminsky. “This is designed to give them some well-deserved relief.”

This bill is not the assemblyman’s only effort focused on the continued recovery from Hurricane Sandy. Having called for state lawmakers to follow a “Sandy-driven agenda,” he supports the construction of an ocean outfall pipe for the Bay Park Sewage Treatment Plant, which is part of the small area of Bay Park that he represents.

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