Sponsors (15)
The bill gives targeted, and in some cases retroactive, tax relief to disaster and wildfire survivors (including non‑itemizers) at the cost of reduced federal revenue, narrow eligibility that leaves many victims out, and added tax‑rule complexity and interactions that can limit other benefits.
Individuals affected by federally declared disasters (including homeowners, middle‑class families, and low‑income taxpayers) can reduce taxable income through expanded personal casualty-loss rules and an above‑the‑line deduction for qualified net disaster losses, giving direct tax relief to disaster survivors.
Survivors of qualifying forest or range (wildfire) disasters (including homeowners and low‑income individuals, especially in rural communities) can exclude qualified wildfire relief payments — such as additional living expenses, lost non‑employer wages, personal injury/death compensation, and emotional‑distress payments — from taxable income, reducing immediate tax burdens during recovery.
The bill defines clear temporal and geographic eligibility windows (Presidential major disaster declarations through Dec 31, 2026 for the casualty‑loss changes, and retroactive wildfire relief coverage to disasters declared after 2014 through 2026), giving predictable and in some cases retroactive relief to people impacted by recent disasters.
All taxpayers may be indirectly affected because the expanded disaster tax deductions and exclusions will reduce federal revenue and could increase deficits or require spending tradeoffs elsewhere in the budget.
Many disaster victims (especially low‑income people, those in jurisdictions without Presidential major‑disaster declarations, and some wildfire victims) will be excluded because eligibility is limited to certain federally declared disasters and specific incident periods, leaving some survivors without the enhanced tax relief.
The statute prevents application of some prior disaster tax provisions after 2024, which may create coordination problems and increased complexity for taxpayers, tax preparers, and administrators when determining which rules apply to a given loss.
Based on analysis of 3 sections of legislative text.
Creates special casualty-loss rules for certain disasters, allows an above-the-line deduction for qualified disaster losses, and excludes qualified wildfire relief payments from income while preventing double benefits.
Introduced September 15, 2025 by W. Greg Steube · Last progress April 28, 2026
Creates special tax rules to help people hit by major disasters and wildfires. It lets individuals compute casualty loss deductions differently for qualified disaster losses, allows a non-itemizer to claim an above-the-line deduction for certain disaster losses, treats a $500 per-event floor for qualified disaster personal casualty losses, and excludes certain wildfire relief payments from taxable income while preventing double tax benefits. It sets effective dates for the new rules in 2025 and 2026 tax years and limits the application of some prior disaster-tax provisions for later years.