Technical corrections only. The diff between v4 and v5 primarily consists of formatting adjustments, such as indentation changes and the removal of extraneous quotes around a section heading. The preamble and footer were also updated to reflect the bill's status as an enrolled bill. No substantive policy changes were made.
Doug LaMalfa Federal Disaster Tax Relief Certainty Act
- Sponsor
- Rep. Steube, W. Gregory [R-FL-17]
- Committees
- Finance Committee (primary)
- Last action
- Sep 11, 2026
Bottom line
The bill provides tax relief for individuals affected by major disasters and wildfires by making certain deductions and income exclusions permanent or extending their applicability.
What it actually does
This bill codifies and extends several temporary tax relief provisions related to major disasters and wildfires. Specifically, it allows individuals to deduct qualified net disaster losses without itemizing and increases the per-casualty deduction floor for disaster-related losses. It also excludes from gross income certain compensation received by individuals for losses or damages resulting from qualified wildfire disasters, provided these losses are not covered by insurance.
Proponents argue
Supporters argue that this bill provides essential and timely tax relief to individuals who have suffered devastating losses due to major disasters and wildfires. They contend that extending and codifying these provisions offers certainty and simplifies the recovery process for victims, ensuring that federal tax policy does not add to their burdens during already difficult times. Proponents highlight that these measures have proven effective in past disaster relief efforts.
Opponents contend
Critics, if any, might raise concerns about the long-term fiscal implications of codifying these tax expenditures, arguing that they contribute to the national deficit without corresponding revenue offsets. Some might also question the equity of specific disaster relief provisions versus broader tax reform that could benefit a wider range of taxpayers or address other forms of hardship.
The bill is concise and can be read and understood by an informed reader within a short timeframe, allowing for a thorough evaluation of its provisions.
Section 2(a), (b), (c) - Amending IRC Section 165(h) and 63(b)
Codification and Extension of Special Rules for Personal Casualty Losses from Major Disasters
This section establishes a special rule for 'qualified net disaster losses,' allowing individuals to deduct these losses. It defines such losses as those from a Presidentially declared major disaster area occurring between December 28, 2019, and January 1, 2027, and not covered by insurance. It also increases the per-casualty deduction floor from $100 to $500 for these disaster-related losses and permits individuals to claim this deduction even if they do not itemize their deductions, treating it as an 'above-the-line' deduction. This effectively extends and makes permanent certain temporary disaster relief measures.
Supporters argue
Supporters contend that this provision is crucial for helping disaster victims rebuild their lives by reducing their tax burden. Allowing an above-the-line deduction ensures that even those who do not itemize can benefit, making the relief more broadly accessible. The increased per-casualty floor acknowledges the often substantial nature of disaster-related losses.
Critics contend
No specific opposition is typically raised against direct disaster tax relief provisions, as they are generally seen as humanitarian. However, some fiscal conservatives might express general concerns about the expansion of tax expenditures without corresponding revenue offsets.
Tradeoffs
The provision balances the immediate need for financial relief for disaster victims against the long-term impact on federal tax revenue. While providing direct aid, it also adds to the complexity of the tax code and represents a cost to the Treasury.
Section 3(a), (b) - Inserting new IRC Section 139M
Codification and Extension of Exclusion for Wildfire Relief Payments
This section creates a new tax code section to exclude 'qualified wildfire relief payments' from an individual's gross income. These payments are defined as compensation for losses, expenses, or damages (including for additional living expenses, lost wages not paid by an employer, personal injury, death, or emotional distress) incurred due to a 'qualified wildfire disaster.' A qualified wildfire disaster is a federally declared disaster resulting from a forest or range fire declared between December 31, 2014, and January 1, 2027. Crucially, the exclusion only applies to losses not compensated by insurance or other means, and it prevents double benefits by disallowing deductions or basis increases for amounts excluded.
The definition of 'qualified disaster area' specifies that the incident period of the disaster must begin on or after December 28, 2019, and before January 1, 2027.
Section 2(a), amending IRC Section 165(h)(6)(C)(ii)
Why it matters:This is standard legislative practice for defining the scope and applicability of tax provisions. The specific dates are crucial for determining which disasters qualify for the extended relief.
Case for: Supporters would argue that these dates are carefully chosen to provide continuous relief, extending existing temporary provisions and ensuring that recent and future disasters within this window are covered, offering certainty to affected communities.
Case against: Critics might argue that such specific date ranges can create arbitrary cutoffs, potentially excluding victims of disasters just outside the specified period, leading to inequities. They might also question why the relief is not made fully permanent without an end date if the intent is to provide certainty.
Estimated impact: This date range defines the temporal scope of the casualty loss relief, impacting all individuals who suffer losses from major disasters declared within this period.
The definition of 'qualified wildfire disaster' specifies that the disaster must be declared after December 31, 2014, and before January 1, 2027.
Section 3(a), inserting new IRC Section 139M(b)(2)
Why it matters:This is standard legislative practice for defining the temporal scope of a tax exclusion. The dates are essential for determining which wildfire events qualify for the tax-free compensation.
Case for: Proponents would state that this timeframe ensures that relief is provided for a significant period of recent and future wildfire events, addressing a pressing need for victims and providing consistency with previous temporary relief measures.
Case against: Opponents might argue that the specific end date creates uncertainty for future wildfire victims and that a permanent exclusion for such payments would be more appropriate given the ongoing nature of wildfire threats.
Estimated impact: This date range defines the temporal scope of the wildfire relief payment exclusion, impacting all individuals who receive compensation for losses from qualified wildfire disasters declared within this period.