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

Protect Innocent Victims of Taxation After Fire Extension Act·September 9, 2025 – March 25, 2026

29 days 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. 5225, S. 3372, and H.R. 7825 are standalone proposals specifically for wildfire victims, while H.R. 5366 and S. 2744 are broader disaster relief packages. H.R. 5366 is the leading vehicle for these changes after being reported out of committee in April 2026.

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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