Wildfire Victim Tax Relief and Recovery Act

This bill helps people and farmers hurt by the Texas Panhandle wildfires. It treats cash help for these fires as disaster relief that is not counted as taxable income, including money for losses, damages, expenses, lower property value, closing costs, or inconvenience. This applies to payments from government agencies or from Xcel Energy and its related companies . The fires covered are Smokehouse Creek, Windy Deuce, Grape Vine Creek, 687 Reamer, and Roughneck in early 2024.

It also helps farmers who had to sell livestock because of fire. They can wait longer to pay taxes on that income and get more time to buy replacement animals (or certain other property). By adding fire to the list of covered reasons, farmers may be able to delay taxes for up to four years, depending on the situation.

• Who is affected: People and property owners hit by the listed Texas Panhandle fires; farmers who sold livestock because of fire .
• What changes: Disaster payments tied to these fires are not taxed; farmers get added tax relief and more time to replace livestock or property after a forced sale due to fire .
• When: The tax-free disaster payments apply to amounts received on or after February 26, 2024. The livestock tax changes apply starting with the 2024 tax year (tax years beginning after December 31, 2023).