Federal Disaster Tax Relief Act of 2023
This act extends the time period during which an area impacted by a major disaster may be considered a qualified disaster area, which allows certain taxpayers to qualify for an increased tax deduction for losses attributable to the disaster. This act also excludes East Palestine, Ohio, train derailment payments and qualified wildfire relief payments from income for federal tax purposes and extends the statute of limitations period for some refund or credit claims resulting from qualified wildfire relief payments.
Generally, individual taxpayers may claim an itemized tax deduction for unreimbursed personal casualty losses attributable to a federally declared disaster, to the extent that the loss exceeds $100 per casualty and total annual losses exceed 10% of adjusted gross income. However, personal casualty losses attributable to a qualified disaster area are deductible to the extent that they exceed $500 per casualty even if the taxpayer claims the standard deduction (rather than itemizing tax deductions) and are not subject to the 10% of adjusted gross income limitation. A qualified disaster area is an area impacted by a major disaster during a specific period of time.
The act extends the time period during which an area impacted by a major disaster may be considered a qualified disaster area and, therefore, allows disaster-related personal casualty losses sustained within those areas to be deducted to the extent such losses exceed $500 per casualty.
The act also treats East Palestine train derailment payments as qualified disaster relief payments, which allows such payments to be excluded from income for federal tax purposes. East Palestine train derailment payments include compensation received on or after February 3, 2023, for losses, damages, expenses, reduction in real property value, closing costs, or inconvenience resulting from the East Palestine train derailment if such amount was provided by
Further, the act allows individuals to exclude from income qualified wildfire relief payments received between 2020 and 2025. Under the act, qualified wildfire relief payments include any unreimbursed amounts received in compensation for losses, expenses, or damages resulting from a forest or range fire that is a federally declared disaster declared after December 31, 2014. Damages include compensation for lost wages, personal injury, death, and emotional distress.
Finally, the act extends the statute of limitations for claiming a refund or credit related to qualified wildfire relief payments previously included in income on a federal tax return.
[118th Congress Public Law 148]
[From the U.S. Government Publishing Office]
[[Page 138 STAT. 1675]]
Public Law 118-148
118th Congress
An Act
To provide tax relief with respect to certain Federal
disasters. <<NOTE: Dec. 12, 2024 - [H.R. 5863]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Federal Disaster
Tax Relief Act of 2023.>>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Disaster Tax Relief Act of
2023''.
SEC. 2. <<NOTE: Applicability.>> EXTENSION OF RULES FOR TREATMENT
OF CERTAIN DISASTER-RELATED PERSONAL CASUALTY
LOSSES.
For purposes of applying section 304(b) of the Taxpayer Certainty
and Disaster Tax Relief Act of 2020, section 301 of such Act shall be
applied by substituting ``the Federal Disaster Tax Relief Act of 2023''
for ``this Act'' each place it appears.
SEC. 3. EXCLUSION FROM GROSS INCOME FOR COMPENSATION FOR LOSSES OR
DAMAGES RESULTING FROM CERTAIN WILDFIRES.
(a) In General.--For purposes of the Internal Revenue Code of 1986,
gross income shall not include any amount received by an individual as a
qualified wildfire relief payment.
(b) <<NOTE: Definitions.>> Qualified Wildfire Relief Payment.--For
purposes of this section--
(1) In general.--The term ``qualified wildfire relief
payment'' means any amount received by or on behalf of an
individual as compensation for losses, expenses, or damages
(including compensation for additional living expenses, lost
wages (other than compensation for lost wages paid by the
employer which would have otherwise paid such wages), personal
injury, death, or emotional distress) incurred as a result of a
qualified wildfire disaster, but only to the extent the losses,
expenses, or damages compensated by such payment are not
compensated for by insurance or otherwise.
(2) Qualified wildfire disaster.--The term ``qualified
wildfire disaster'' means any federally declared disaster (as
defined in section 165(i)(5)(A) of the Internal Revenue Code of
1986) declared, after December 31, 2014, as a result of any
forest or range fire.
(c) Denial of Double Benefit.--Notwithstanding any other provision
of the Internal Revenue Code of 1986--
(1) no deduction or credit shall be allowed (to the person
for whose benefit a qualified wildfire relief payment is made)
for, or by reason of, any expenditure to the extent of the
[[Page 138 STAT. 1676]]
amount excluded under this section with respect to such
expenditure, and
(2) no increase in the basis or adjusted basis of any
property shall result from any amount excluded under this
subsection with respect to such property.
(d) <<NOTE: Time period.>> Limitation on Application.--This section
shall only apply to qualified wildfire relief payments received by the
individual during taxable years beginning after December 31, 2019, and
before January 1, 2026.
(e) Extension of Period of Limitation.--In the case of a claim for
credit or refund which is properly allocable to the exclusion which is
described in subsection (a)--
(1) the period of limitation prescribed in section 6511(a)
of the Internal Revenue Code of 1986 for the filing of such
claim shall be treated as not expiring earlier than the date
that is 1 year after the date of the enactment of this Act, and
(2) any limitation described in section 6511(b)(2) of such
Code shall not apply.
SEC. 4. <<NOTE: Definitions.>> EAST PALESTINE DISASTER RELIEF
PAYMENTS.
(a) Disaster Relief Payments to Victims of East Palestine Train
Derailment.--East Palestine train derailment payments shall be treated
as qualified disaster relief payments for purposes of section 139(b) of
the Internal Revenue Code of 1986.
(b) East Palestine Train Derailment Payments.--For purposes of this
section, the term ``East Palestine train derailment payment'' means any
amount received by or on behalf of an individual as compensation for
loss, damages, expenses, loss in real property value, closing costs with
respect to real property (including realtor commissions), or
inconvenience (including access to real property) resulting from the
East Palestine train derailment if such amount was provided by--
(1) a Federal, State, or local government agency,
(2) Norfolk Southern Railway, or
(3) any subsidiary, insurer, or agent of Norfolk Southern
Railway or any related person.
(c) Train Derailment.--For purposes of this section, the term ``East
Palestine train derailment'' means the derailment of a train in East
Palestine, Ohio, on February 3, 2023.
[[Page 138 STAT. 1677]]
(d) Effective Date.--This section shall apply to amounts received on
or after February 3, 2023.
Approved December 12, 2024.
LEGISLATIVE HISTORY--H.R. 5863:
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HOUSE REPORTS: No. 118-348 (Comm. on Ways and Means).
CONGRESSIONAL RECORD, Vol. 170 (2024):
May 21, considered and passed House.
Dec. 4, considered and passed Senate.
<all>
Mr. Smith (MO) moved to suspend the rules and pass the bill, as amended.
Considered under suspension of the rules. (consideration: CR H3379-3382)
DEBATE - The House proceeded with forty minutes of debate on H.R. 5863.
At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
Considered as unfinished business. (consideration: CR H3387-3388)
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 382 - 7 (Roll no. 219). (text: CR H3379)
Roll Call #219 (House)On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 382 - 7 (Roll no. 219). (text: CR H3379)
Roll Call #219 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Finance.
Enacted as Public Law 118-148
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Senate Committee on Finance discharged by Unanimous Consent.
Senate Committee on Finance discharged by Unanimous Consent.
Passed/agreed to in Senate: Passed Senate without amendment by Voice Vote.
Passed Senate without amendment by Voice Vote. (consideration: CR S6813)
Message on Senate action sent to the House.
Presented to President.
Presented to President.
Signed by President.
Signed by President.
Became Public Law No: 118-148.
Became Public Law No: 118-148.