Sponsors (15)
The bill expands and clarifies tax relief for disaster-affected individuals (including non-itemizers and wildfire victims) to speed recovery and simplify administration, but it reduces federal revenue, adds compliance complexity, and provides time-limited, uneven coverage that leaves some victims without relief.
Homeowners and renters in Presidentially declared major disaster areas can claim qualified personal casualty loss relief even if they don't itemize, increasing tax relief availability for many disaster-affected households.
Individuals with disaster losses occurring between Dec 28, 2019 and Dec 31, 2026 get retroactive access to special casualty-loss tax treatment, allowing some taxpayers to amend prior returns or obtain relief for recent disasters.
People who suffer qualified wildfire losses receive tax-excluded payments for unreimbursed losses and certain living expenses (including payments for injury, death, or emotional distress), boosting net resources and speeding recovery for affected households.
Allowing non-itemizers to claim disaster losses will reduce federal revenue, modestly increasing the deficit or reducing funds available for other programs.
The special tax treatment is limited to disasters with incident periods starting before Jan 1, 2027, creating a temporary/uneven patchwork of relief that leaves future disaster victims without the same access.
Taxpayers and the IRS may face added complexity and compliance burdens proving incident periods, attributing losses to qualified disasters, and performing the required loss calculations tied to FEMA declarations and §165 rules.
Based on analysis of 3 sections of legislative text.
Restores special casualty-loss deductions for certain major disasters, lets non-itemizers claim those losses, and excludes specified wildfire relief payments from income.
Creates two targeted tax changes for disaster and wildfire losses: (1) restores a special casualty-loss rule so people who suffer losses from Presidentially declared major disasters between Dec 28, 2019 and Jan 1, 2027 can claim a "qualified net disaster loss," including allowing non-itemizers to claim that deduction; and (2) creates a new tax exclusion so certain wildfire relief payments received for losses from federally declared wildfires (declared after Dec 31, 2014 and before Jan 1, 2027) are not included in gross income, with limits to prevent double tax benefits. The measure sets different effective dates for the deduction rule (tax years beginning after Dec 31, 2024) and the wildfire-payment exclusion (payments received in tax years beginning after Dec 31, 2025).
Introduced September 15, 2025 by W. Greg Steube · Last progress April 28, 2026