Sponsors (64)
The bill restores tax relief and refund access for people with personal casualty/theft losses and clarifies eligibility, but it increases IRS workload and reduces federal revenue while leaving some other claimants without comparable relief.
Taxpayers who suffered personal casualty or theft losses (including middle‑class and low‑income households) can again claim deductions for qualifying losses for tax years after 2017 and may file refund claims for previously disallowed losses, reducing taxable income and potentially yielding refunds.
Taxpayers with §165(c)(3) personal casualty losses get clearer rules about refund eligibility, reducing uncertainty for filers and tax preparers about whether and how to pursue refunds.
Broader casualty-loss deductions and extended refund windows will increase IRS administrative workload and complexity, likely slowing processing, delaying refunds, and raising the risk of more audits or longer taxpayer interactions.
Allowing retroactive deductions and additional refund claims will reduce federal revenue, which could increase deficits or crowd out other federal spending priorities.
The extension applies only to §165(c)(3) personal casualty-loss claims, so filers with other types of claims receive no extra time and may still be barred from refunds, producing unequal outcomes.
Based on analysis of 3 sections of legislative text.
Deletes a limit on individual casualty/theft loss deductions for post-2017 years and extends refund-claim deadlines for certain taxpayers with suspended casualty losses.
Official title: To amend the Internal Revenue Code of 1986 to reinstate the deduction for personal casualty losses as in effect prior to the enactment of Public Law 115-97.
Introduced May 15, 2025 by W. Greg Steube · Last progress May 15, 2025
Removes a statutory restriction that narrowed personal casualty and theft loss deductions for individuals for tax years after 2017, restoring eligibility to claim those deductions for covered years. It also extends and modifies the time window for certain taxpayers to file refund or credit claims tied to casualty losses that were previously suspended, enabling affected filers who filed returns before 2025 to submit claims within an expanded deadline tied to this Act's enactment date.