Income taxes: exclusions: wildfire loss mitigation payments

Property owners can keep the full value of eligible grants, rebates, and other aid used to reduce wildfire risk. The law also extends the exclusion to assistance from the Proposition 4-funded wildfire mitigation grant program.

What the law does ​

• Excludes eligible wildfire-mitigation payments from personal and corporate gross income for tax years beginning January 1, 2024, through December 31, 2030.
• Covers assistance for home or structure hardening, vegetation management, defensible space, fuel modification, and community wildfire resilience.
• Applies to assistance received through the California Wildfire Mitigation Financial Assistance Program or the wildfire mitigation grant program authorized under Proposition 4.
• Requires the joint powers authority for the financial-assistance program to report by December 1, 2029, on distributions and potentially eligible recipients.
• Requires the Office of Emergency Services to report by December 1, 2031, on grant-program distributions and potentially eligible recipients, and provides it $10,000 for that reporting.

Who it affects ​

• Taxpayers who own structures receiving qualifying wildfire-mitigation assistance.
• Recipients of grants, rebates, direct assistance, or other aid from the two covered state wildfire-mitigation programs.

Context ​

The tax exclusions expire December 1, 2031.