Disaster Mitigation and Tax Parity Act of 2025

This bill makes certain disaster‑proofing grants from state or local programs tax‑free. If you get money to upgrade your home to reduce damage from windstorms, earthquakes, or wildfires, you don’t have to count that money as income on your federal taxes. It also says these payments won’t raise the amount the IRS treats as your home’s cost for future tax calculations.

The tax break covers programs run by a state or local government, a joint powers authority, or a state‑created “insurer of last resort” that is regulated by the state. The money must be used only to make damage‑reducing improvements to your property.

• Who is affected: Homeowners receiving state‑based help to harden their homes against windstorms, earthquakes, or wildfires.
• What changes: These payments don’t count as taxable income and won’t increase your home’s tax value for future taxes.
• When: Applies starting with the 2021 tax year, and the IRS must allow people to claim this by filing an amended return if needed.