Bill > HR5225

This bill amends the Internal Revenue Code to create a tax exemption for "qualified wildfire relief payments" received by individuals who have suffered losses from wildfires. Specifically, the bill allows individuals to exclude from their gross income any compensation received for losses, expenses, or damages resulting from a federally declared wildfire disaster that occurred after December 31, 2014. These payments can cover various types of losses, including additional living expenses, lost wages (except those paid by an employer), personal injury, death, or emotional distress. The exemption applies only to amounts not already covered by insurance. To prevent "double benefits," individuals cannot also claim a tax deduction or credit for the same expenses, and the payments will not increase the tax basis of any property. The tax exemption will be available for payments received between January 1, 2026, and December 31, 2032. The bill is titled the "Protect Innocent Victims of Taxation After Fire Extension Act" and is designed to provide financial relief to individuals impacted by wildfires without adding additional tax burden.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/5225/all-info