Bill > S2744

This bill provides tax relief for individuals who have suffered losses from major disasters and wildfires. Specifically, the bill modifies the Internal Revenue Code to create new rules for personal casualty losses arising from federally declared major disasters between July 4, 2025, and January 1, 2027. For these "qualified disaster losses," taxpayers can deduct losses that exceed 10% of their adjusted gross income, with a modified dollar limitation. The bill also creates a new tax provision that excludes from gross income certain payments received as compensation for wildfire-related losses, such as additional living expenses, lost wages, personal injury, and emotional distress. These wildfire relief payments would be tax-free for payments received between January 1, 2026, and January 1, 2031, as long as the losses are not already covered by insurance. The legislation ensures that taxpayers cannot claim both a deduction and an exclusion for the same expenses and includes provisions to prevent individuals from increasing their property basis through these tax-free payments. This bill aims to provide financial relief and support to individuals impacted by natural disasters during the specified time period.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/2744/all-info