Doug LaMalfa Federal Disaster Tax Relief Certainty Act

If this passes: Disaster victims in covered areas receive permanent tax deductions for casualty losses and tax-free wildfire relief payments, reducing their out-of-pocket burden of recovery. Homeowners in the California Camp Fire (2018), Dixie Fire (2021), and similar recent major disasters, as well as recipients of settlement payments from state wildfire funds, gain tax relief. The federal government foregoes revenue (amount unspecified in the bill). If this does not pass: Disaster victims would revert to standard casualty loss deductions (subject to the 10% adjusted gross income floor) and would owe income tax on wildfire relief payments received. Prior analogous policies: The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (P.L. 116-260) provided temporary disaster casualty loss deductions that this bill makes permanent. California's state-level disaster assistance programs and FEMA's Individual Assistance have been coordinated with federal tax provisions since 2017. No major negative consequences or unintended effects from prior disaster tax relief extensions have been documented in non-partisan assessments, though revenue costs accumulate with each extension.