Doug LaMalfa Federal Disaster Tax Relief Certainty Act

Disaster survivors can deduct more casualty losses or exclude qualifying wildfire compensation from taxable income, reducing their federal tax burden.

What the law does ​

• Allows special casualty-loss treatment for presidentially declared major disasters beginning from December 28, 2019, through December 31, 2026.
• Lets taxpayers deduct qualified net disaster losses without itemizing, subject to a $500 threshold per casualty loss.
• Applies the disaster-loss rules to tax years beginning after December 31, 2024.
• Excludes qualifying payments for uninsured losses, expenses, or damages from federally declared wildfires occurring after 2014 and before 2027.
• Applies the wildfire-payment exclusion to payments received in tax years beginning after December 31, 2025.
• Bars duplicate deductions, credits, or property-basis increases for amounts excluded as wildfire compensation.

Who it affects ​

• Individuals with personal casualty losses from qualifying presidentially declared disasters.
• People receiving qualifying compensation for uninsured wildfire-related losses, expenses, or damages.

Breakdown ​

Doug LaMalfa Federal Disaster Tax Relief Certainty Act ​

This title extends special federal tax relief for individuals with personal casualty losses from major disasters occurring before 2027. It also excludes qualifying compensation for uninsured wildfire-related losses and damages from federal taxable income, while preventing taxpayers from receiving duplicate tax benefits for the same costs.

Key takeaways

• Individuals may claim special casualty-loss treatment for presidentially declared major disasters whose incident periods begin on or after December 28, 2019, and before January 1, 2027.
• The disaster-loss rules apply to taxable years beginning after December 31, 2024.
• Taxpayers may deduct qualified net disaster losses even if they do not itemize deductions.
• Each qualified disaster-related personal casualty loss is subject to a $500 threshold.
• Qualifying payments for uninsured losses, expenses, or damages from federally declared wildfires after 2014 and before 2027 are excluded from gross income.
• The wildfire-payment exclusion applies to payments received in taxable years beginning after December 31, 2025, and taxpayers cannot also claim deductions, credits, or property-basis increases for the excluded amounts.