Bill > HR5366

This bill provides tax relief for individuals affected by major disasters and wildfires by making several key changes to the Internal Revenue Code. For personal casualty losses arising from federally declared major disasters between July 4, 2025, and January 1, 2027, the bill allows taxpayers to claim a "qualified net disaster loss" that can be deducted more easily, with the deductible amount calculated by combining the net disaster loss and a portion of losses exceeding 10% of the individual's adjusted gross income. The bill also modifies the standard tax deduction to include a new "disaster loss deduction" and adjusts the dollar limitation on such losses. Additionally, the bill creates a new provision that excludes from gross income certain payments received as compensation for losses, expenses, or damages resulting from wildfires, specifically for relief payments received between January 1, 2026, and January 1, 2031. These payments can cover various types of losses including living expenses, lost wages (except those paid by an employer), personal injury, death, and emotional distress, but cannot be compensated by insurance or result in additional tax benefits. The changes aim to provide financial relief to individuals who have suffered significant losses due to natural disasters.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/5366/all-info