Sponsors (15)
The bill expands and clarifies tax relief to give disaster and wildfire victims (including non-itemizers and some past-loss claimants) faster, larger tax benefits to aid recovery, at the cost of reduced federal revenue, added compliance complexity, and time-limited/uneven coverage that may leave some victims without relief.
Homeowners, renters, and other taxpayers in Presidentially declared major disaster areas (including qualifying wildfire victims) can receive expanded tax relief — non-itemizers can claim disaster-related personal casualty loss relief and certain wildfire-related living and unreimbursed loss payments can be excluded from income — increasing after-disaster resources.
Individuals with qualifying disaster losses that occurred between Dec 28, 2019 and Dec 31, 2026 get retroactive access to special casualty-loss tax treatment, helping people still rebuilding from recent disasters.
The bill creates a clear statutory category and computation rules for qualified net disaster losses, simplifying and standardizing tax relief after major disasters and aiding IRS administration and taxpayer clarity.
Allowing non-itemizers to claim disaster losses and excluding certain relief from income will reduce federal revenue and could modestly increase the deficit or reduce funding available for other federal programs.
Taxpayers may face added complexity and compliance burdens proving incident periods, disaster attribution, and computing losses under FEMA declaration rules and §165 standards, increasing time and recordkeeping costs.
Key provisions are time-limited (incident periods or covered events ending in 2026/2027), producing uneven, temporary relief and potentially leaving future disaster victims without similar tax help.
Based on analysis of 3 sections of legislative text.
Creates a temporary casualty-loss deduction for qualified disaster losses and excludes certain wildfire relief payments from income when not otherwise compensated.
Creates temporary tax rules to help individuals hit by major disasters and wildfires. It restores a special casualty-loss deduction category for ‘‘qualified net disaster losses’’ from Presidentially declared major disasters occurring between Dec 28, 2019 and the end of 2026 (with changes applying to tax years after Dec 31, 2024) and lets some non-itemizers claim the disaster-related deduction. It also makes certain wildfire relief payments tax-free (for federally declared wildfire disasters after Dec 31, 2014 and before Jan 1, 2027) to the extent losses aren’t otherwise compensated, and denies deductions or basis increases for amounts excluded from income.
Introduced September 15, 2025 by W. Greg Steube · Last progress April 28, 2026