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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5366 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 5366
To amend the Internal Revenue Code of 1986 to codify and extend the
rules for personal casualty losses arising from major disasters and the
rules for the exclusion from gross income of compensation for losses or
damages resulting from certain wildfires.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 15, 2025
Mr. Steube (for himself, Mr. Thompson of California, Mr. LaMalfa, and
Mr. Panetta) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to codify and extend the
rules for personal casualty losses arising from major disasters and the
rules for the exclusion from gross income of compensation for losses or
damages resulting from certain wildfires.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Disaster Tax Relief Act of
2025''.
SEC. 2. CODIFICATION AND EXTENSION OF RULES FOR CASUALTY LOSSES ARISING
FROM MAJOR DISASTERS.
(a) Treatment of Losses.--
(1) In general.--Section 165(h) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(6) Special rule for qualified disaster losses.--
``(A) In general.--If an individual has a qualified
net disaster loss for any taxable year, the amount
determined under paragraph (2)(A)(ii) shall be the sum
of--
``(i) such net disaster loss, and
``(ii) so much of the excess referred to in
the matter preceding clause (i) of paragraph
(2)(A) (reduced by the amount in clause (i) of
this subparagraph) as exceeds 10 percent of the
adjusted gross income of the individual.
``(B) Qualified net disaster loss.--For purposes of
subparagraph (A), the term `qualified net disaster
loss' means the excess of qualified disaster-related
personal casualty losses over personal casualty gains.
``(C) Qualified disaster-related personal casualty
losses.--
``(i) In general.--For purposes of this
subsection, the term `qualified disaster-
related personal casualty losses' means losses
described in subsection (c)(3) (determined
after application of paragraph (1)) which arise
in a qualified disaster area on or after the
first day of the incident period of the
qualified disaster to which such area relates,
and which are attributable to such disaster.
``(ii) Qualified disaster area.--The term
`qualified disaster area' means any area with
respect to which a major disaster has been
declared by the President under section 401 of
the Robert T. Stafford Disaster Relief and
Emergency Assistance Act if the incident period
of the disaster with respect to which such
declaration is made begins after July 4, 2025,
and before January 1, 2027.
``(iii) Qualified disaster.--The term
`qualified disaster' means, with respect to any
qualified disaster area, the disaster by reason
of which a major disaster was declared with
respect to such area.
``(iv) Incident period.--For purposes of
this paragraph, the term `incident period'
means, with respect to any qualified disaster,
the period specified by the Federal Emergency
Management Agency as the period during which
such disaster occurred.''.
(2) Conforming amendment.--Section 165(h)(5)(B)(ii) of such
Code is amended by inserting ``or (6)'' after ``paragraph
(2)(A)''.
(b) Dollar Limitation.--Section 165(h)(1) of the Internal Revenue
Code of 1986 is amended by striking ``$500 ($100 for taxable years
beginning after December 31, 2009)'' and inserting ``$100 ($500 in the
case of any net disaster loss to which paragraph (3) applies)''.
(c) Standard Deduction.--
(1) In general.--Section 63(c)(1) of the Internal Revenue
Code of 1986 is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``and'', and by adding at the
end the following new subparagraph:
``(C) the disaster loss deduction.''.
(2) Disaster loss deduction.--Section 63(c) of such Code is
amended by adding at the end the following new paragraph:
``(8) Disaster loss deduction.--For the purposes of
paragraph (1), the term `disaster loss deduction' means the
excess of qualified net disaster losses (as defined in section
165(h)(6)(B)) over the amount of personal casualty gains (as
defined in section 165(h)(3)(A)) reduced by any portion of such
gains taken into account under section 165(h)(5)(B)(i).''.
(d) Treatment Under Alternative Minimum Tax.--Section 56(b)(1)(D)
of the Internal Revenue Code of 1986 is amended by inserting ``(other
than the disaster loss deduction)'' after ``section 63(c)''.
(e) Effective Date.--The amendments made by this section shall
apply to losses incurred in taxable years beginning after December 31,
2024.
SEC. 3. CODIFICATION AND EXTENSION OF EXCLUSION FROM GROSS INCOME OF
COMPENSATION FOR LOSSES OR DAMAGES RESULTING FROM CERTAIN
WILDFIRES.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting before section
140 the following new section:
``SEC. 139M. COMPENSATION FOR LOSSES OR DAMAGES RESULTING FROM CERTAIN
WILDFIRES.
``(a) In General.--Gross income shall not include any amount
received by an individual as a qualified wildfire relief payment.
``(b) 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)) after December 31, 2014, as a
result of any forest or range fire.
``(c) Denial of Double Benefit.--Notwithstanding any other
provision of this title--
``(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 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
section with respect to such property.
``(d) Limitation on Application.--This section shall only apply to
qualified wildfire relief payments received by the individual during
taxable years beginning after December 31, 2025, and before January 1,
2031.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code is amended by inserting before
the item related to section 140 the following new item:
``Sec. 139M. Compensation for losses or damages resulting from certain
wildfires.''.
(c) Effective Date.--The amendments made by this section shall
apply to payments received in taxable years beginning after December
31, 2025.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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