Doug LaMalfa Federal Disaster Tax Relief Certainty Act

What this does

The bill codifies and extends two temporary federal disaster tax provisions. First, it adds a special casualty-loss deduction to the tax code for qualified net disaster losses, which is not reduced by the 10 percent of adjusted-gross-income floor that applies to ordinary casualty losses, and it lets a qualifying disaster loss use a $500 per-casualty floor instead of the general $100 floor. That special treatment covers presidentially declared major disasters with an incident period beginning on or after December 28, 2019 and before January 1, 2027, and it is available even to taxpayers who do not itemize their deductions. Those changes apply to tax years beginning after December 31, 2024, and replace two prior temporary disaster-loss provisions for those years. Second, the bill excludes qualified wildfire relief payments from gross income, covering compensation individuals receive for wildfire-related losses, expenses, or damages only to the extent that compensation is not already covered by insurance or otherwise, for wildfire disasters federally declared after December 31, 2014 and before January 1, 2027. No deduction, credit, or increase in basis is allowed for amounts covered by that exclusion, and it applies to payments received in tax years beginning after December 31, 2025.