Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act

Key Points

• This bill would make wildfire relief payments tax-free, meaning people who receive money to recover from a wildfire would not have to count it as income on their federal taxes. This covers payments for lost wages, medical expenses, additional living costs, and emotional distress.
• The tax exclusion applies to any wildfire that was officially declared a federal disaster after December 31, 2014, covering a broad range of past and future wildfire events across the country.
• The tax break only applies to payments that aren't already covered by insurance, and recipients can't claim both the tax exclusion and a separate deduction or credit for the same expense. This prevents a double benefit.
• The exclusion applies to payments received between January 1, 2026, and December 31, 2032, giving wildfire victims a seven-year window of tax relief. It would also retroactively cover qualifying payments from earlier disasters received during this period.
• The bill has bipartisan cosponsors from California, Oregon, Utah, and Hawaii, reflecting the widespread impact of wildfires across western states. It was referred to the House Ways and Means Committee.

Votes

No votes have been recorded for this legislation yet.