House Passes Federal Disaster Tax Relief Act to Exempt Wildfire Payments from Federal Income Tax

Protect Innocent Victims of Taxation After Fire Extension Act·September 9, 2025 – April 28, 2026

2 months ago

House Passes Federal Disaster Tax Relief Act to Exempt Wildfire Payments from Federal Income Tax

The House of Representatives passed the Federal Disaster Tax Relief Act of 2025 to help victims of natural disasters. This bill lets taxpayers deduct property losses from their taxes and stops the government from taxing wildfire relief payments. The bill covers major disasters declared between July 2025 and the end of 2026. Senator Rick Scott praised the House for passing the bill and urged the Senate to do the same. Scott is leading a similar bill in the Senate to expand tax deductions for property losses. These efforts build on earlier bills like the Protect Innocent Victims of Taxation After Fire Extension Act, Senate Bill 3372, and Representative Fong's bill.

Senator Rick Scott on Disaster Tax Relief

3 months ago

House Committee Advances Federal Disaster Tax Relief Act to Protect Wildfire and Disaster Victims

The House Ways and Means Committee approved the Federal Disaster Tax Relief Act of 2025 to help victims of natural disasters keep more of their recovery funds. This bill allows taxpayers to deduct losses from their taxes without needing to itemize. It also ensures that wildfire compensation payments are not taxed as federal income according to Representative Steube. The legislation builds on several bipartisan efforts to stop the federal government from taxing money meant for rebuilding lives after major fires and storms. Earlier proposals like the Protect Innocent Victims of Taxation After Fire Extension Act and a similar Senate bill sought to exempt relief payments for disasters dating back to 2014. Currently, many victims find that their settlement funds for lost wages or medical bills are treated as taxable income. This reduces the amount of money they have available to rebuild their homes and lives. These bills aim to ensure that money meant for recovery is not taken back by the IRS.

H.R. 5366Rep. Steube Introduces Bipartisan Bill to Provide Tax Relief for Disaster and Wildfire VictimsRep. Steube on Ways and Means Committee PassageH.R. 5225Rep. LaMalfa Introduces Bipartisan Bill to End Federal Taxes on Wildfire Relief Payments S. 3372Sen. Padilla Introduces Bipartisan Bill to End Federal Taxes on Wildfire Relief Payments

The Facts

Who This Affects

6 groups

Helps

Policies

H.R. 5366 and S. 2744 are companion bills for broad disaster relief, with the House version being the furthest along. The other three bills are specific wildfire tax exemptions that cover different years and are currently stalled in committee.

H.R. 5366

Rep. Steube Introduces Bipartisan Bill to Provide Tax Relief for Disaster and Wildfire Victims

Mar 25

H.R. 7825

Rep. Fong Introduces the Protect Innocent Victims of Taxation After Fire Extension Act

Mar 5

S. 3372

Sen. Padilla Introduces Bipartisan Bill to End Federal Taxes on Wildfire Relief Payments

Dec 4

H.R. 5225

Rep. LaMalfa Introduces Bipartisan Bill to End Federal Taxes on Wildfire Relief Payments

Sep 9

S. 2744

Sen. Rick Scott Pushes Bill to Make Wildfire Relief Tax-Free and Expand Disaster Deductions

Sep 9

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