119-HR-5366 Journalist Public Summary
119 · HR 5366 Doug LaMalfa Federal Disaster Tax Relief Certainty Act
A bipartisan House bill would lock in and extend federal tax relief for people hit by major disasters and make certain wildfire compensation payments tax‑free for 2026–2030, with unanimous committee support as of March 25, 2026.
Public Summary — 119-HR-5366: Federal Disaster Tax Relief Act of 2025
Headline Summary: A bipartisan tax-relief bill to help disaster victims deduct more of their losses and to keep qualified wildfire payouts from being taxed.
What It Does: The bill revives and codifies special tax rules for people in areas where the President declares a major disaster. It lets affected taxpayers claim a separate “disaster loss deduction” even if they take the standard deduction and shields that deduction from the Alternative Minimum Tax. It applies to disasters whose official incident period starts between July 4, 2025 and December 31, 2026, and to losses in tax years beginning after December 31, 2024. The bill also excludes from taxable income certain payments to individuals for losses or damages from federally declared wildfire disasters (covering disasters after December 31, 2014), for payments received in tax years 2026 through 2030. It bars “double dipping,” so you can’t also deduct expenses or increase property basis that are already covered by those tax‑free payments.
- Who’s For It: Bipartisan sponsors—Reps. W. Steube (R‑FL), Mike Thompson (D‑CA), Doug LaMalfa (R‑CA), and Jimmy Panetta (D‑CA).
- The House Ways and Means Committee advanced it unanimously (43–0) on March 25, 2026, signaling broad cross‑party support.
- Backers say it speeds recovery, prevents surprise tax bills on wildfire settlements, and makes it easier for families to claim uninsured disaster losses.
- Who’s Against It: No formal opposition was recorded in committee to date.
- Potential concerns some budget hawks and tax‑policy skeptics may raise: the cost to the Treasury, creating issue‑specific carve‑outs in the tax code, retroactive and temporary provisions that add complexity, and questions about fairness across different types of disasters.
What’s Next: After the March 25, 2026 committee vote to “order the bill reported,” it awaits a vote by the full House. If it passes, it moves to the Senate; if both chambers approve, it would go to President Donald J. Trump for signature or veto.
Discussion