This legislation makes permanent tax breaks for people hit by federally declared disasters and wildfires, covering disaster years 2020 through 2026. Disaster victims could deduct casualty losses without itemizing and without first subtracting 10% of their income, the way the rules normally require. It also lets wildfire victims exclude relief payments — for things like lost wages, property damage, or emotional distress — from their taxable income, retroactive to fires declared after 2014. The per-loss floor for qualified disaster claims is set at $500 (vs. $100 for ordinary casualty losses), and households cannot also deduct expenses already covered by the excluded payments.
Average Household Impact
- Casualty-loss deduction access — Available to non-itemizers for qualified disaster losses
- Disaster casualty deduction — 10% AGI floor bypassed for qualified disaster losses
- Wildfire relief payment exclusion — Compensation kept out of gross income for federally declared wildfires 2015-2026
- Per-casualty deductible floor — Set at $500 for qualified disaster losses, up from $100
Congressional Summary
Doug LaMalfa Federal Disaster Tax Relief Certainty ActThis bill extends the federal tax deduction for qualified disaster-related personal casualty losses and the exclusion from gross income of qualified wildfire relief payments.Under current law, unreimbursed personal casualty losses arising in a qualified disaster area (qualified disaster-related personal casualty losses) are deductible (as an itemized tax deduction or as part of the standard tax deduction) if such losses exceed $500 per casualty. A qualified disaster area is an area with respect to which a major disaster has been declared during the period beginning in 2020 and ending 60 days after July 4, 2025, if the incident period begins on or after December 28, 2019, and on or before July 4, 2025.The bill extends the federal tax deduction for qualified disaster-related personal casualty losses by defining a qualified disaster area as an area with respect to which a major disaster has been declared if the incident period begins on or after December 28, 2019, and before January 1, 2027.The bill provides that the exclusion from gross income of qualified wildfire relief payments applies to such payments attributable to forest or range fires declared a federal disaster after 2014 and before 2027, regardless of when such payments are received. (Currently, qualified wildfire relief payments attributable to forest or range fires declared a federal disaster after 2014 and received after 2019 and before 2026 may be excluded from gross income.)The bill also provides statutory authority for several related tax rules.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Received in the Senate and Read twice and referred to the Committee on Finance.
- Action Date
- 2026-04-28
- Date Added
- 2026-04-25
- Source
- Congress.gov →
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