Sponsors (44)
The bill restores and clarifies tax deductions and refund opportunities for people with personal casualty losses—helping disaster‑affected households recover—while imposing modest fiscal costs and increasing IRS workload, and leaving other claimants without the same extension.
Taxpayers who suffered personal casualty or theft losses (including disaster victims, middle‑class and low‑income households) can claim deductions for qualifying losses for tax years after 2017 and may file refund claims for previously suspended deductions, reducing taxable income and enabling refunds.
Households recovering from disasters get targeted tax relief that can help post‑disaster financial recovery and reduce immediate out‑of‑pocket hardship.
Affected filers gain clearer rules about eligibility for refunds tied to §165(c)(3) personal casualty losses, reducing uncertainty for those preparing claims.
Allowing retroactive and expanded casualty‑loss deductions and refund claims will reduce federal revenue, which could increase budget deficits or crowd out other spending priorities.
Extending deductions and refund windows and clarifying eligibility will increase IRS administrative workload and tax‑processing complexity, risking slower processing, more audits or longer delays for other filers.
The measure extends relief only for §165(c)(3) personal casualty losses, so taxpayers with other types of claims do not receive the same extension and may still face denial if outside normal limitation periods.
Based on analysis of 3 sections of legislative text.
Restores certain personal casualty/theft loss deductions removed after 2017 and extends filing deadlines for related refund claims for qualifying earlier returns.
Reinstates a previously removed rule that limited individual personal casualty and theft loss deductions and allows certain taxpayers to claim those deductions for post-2017 years. It also extends and modifies the time limits for filing refund or credit claims tied to those suspended casualty loss deductions for qualifying earlier tax-year returns. The change makes personal casualty-loss deductions available again for taxable years beginning after December 31, 2017, and gives taxpayers who previously had those deductions suspended extra time and special rules to file refund claims tied to those suspended deductions for returns filed before January 1, 2025.
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