Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act

Summary

Excludes certain wildfire relief payments from recipients' gross income when the payments compensate for losses, expenses, or damages from federally declared forest or range fire disasters (declared after Dec. 31, 2014) and the amounts are not otherwise compensated. It also prevents recipients from claiming related tax benefits — such as deductions, credits, or increases in tax basis — to the extent those amounts are excluded. The exclusion applies to amounts received after December 31, 2025, and ends for amounts received after December 31, 2032. The bill creates a new Internal Revenue Code section to implement the rule and adds a table-of-sections entry for it.

• Creates a new IRC section excluding certain wildfire relief payments from individual gross income.
• Covers payments for property loss, additional living expenses, lost wages (except employer-paid replacement wages), personal injury, death, and emotional distress.
• Exclusion applies only when amounts are not otherwise compensated by insurance or other sources.
• Disallows deductions, credits, and basis increases for the portion of losses excluded from income.
• Applies to federally declared forest or range fire disasters declared after Dec. 31, 2014.
• Effective for payments received after Dec. 31, 2025, and ends for payments received after Dec. 31, 2032.
• Adds a clerical table-of-sections entry and establishes the authority in a new IRC provision.