What does Preamble of Federal Disaster Tax Relief Act of 2025 do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment aims to codify and extend rules related to personal casualty losses from major disasters. It also seeks to codify and extend rules concerning the exclusion of income related to losses or damages from certain wildfires.

What does SHORT TITLE. of Federal Disaster Tax Relief Act of 2025 do?

This bill is formally titled the Federal Disaster Tax Relief Act of 2025.

What does CODIFICATION AND EXTENSION OF RULES FOR CASUALTY LOSSES ARISING of Federal Disaster Tax Relief Act of 2025 do?

This section amends Internal Revenue Code Section 165(h) to establish a special rule for qualified disaster losses. It defines 'qualified net disaster loss,' 'qualified disaster-related personal casualty losses,' 'qualified disaster area,' 'qualified disaster,' and 'incident period' for this purpose. A 'qualified disaster area' is defined as an area where a major disaster has been declared by the President under the Stafford Act, with the declaration occurring between July 5, 2025, and January 1, 2027. The section modifies the dollar limitation for disaster loss deductions, increasing it to $100 ($500 in certain cases). It amends Section 63(c)(1) to include the 'disaster loss deduction' as part of the standard deduction. The amendments apply to losses incurred in taxable years beginning after December 31, 2024.

What does CODIFICATION AND EXTENSION OF EXCLUSION FROM GROSS INCOME OF of Federal Disaster Tax Relief Act of 2025 do?

This section amends the Internal Revenue Code of 1986 to exclude certain wildfire relief payments from gross income. A new section, 139M, is added to define 'qualified wildfire relief payment' as compensation for losses, expenses, or damages resulting from a 'qualified wildfire disaster'. A 'qualified wildfire disaster' is defined as a Federally declared disaster after December 31, 2014, resulting from a forest or range fire. The exclusion applies only to payments received during taxable years beginning after December 31, 2025, and before January 1, 2031. The section denies deductions or credits for expenditures to the extent they are covered by the excluded payments and prevents increases in property basis due to excluded amounts. A clerical amendment updates the table of sections to include the new section 139M.

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Federal Disaster Tax Relief Act of 2025

Last updated: 3/25/2026 · Introduced: 9/15/2025

Author: W. Steube (R-FL)

TL;DR (AI)

This bill increases the deduction limit for qualified disaster losses to $100 (or $500 in certain cases) and includes this deduction as part of the standard deduction.
The bill excludes certain payments received for wildfire losses from gross income, defining these as 'qualified wildfire relief payments' resulting from federally declared wildfire disasters.
It establishes a timeframe for qualifying disaster declarations (July 5, 2025 – January 1, 2027) and wildfire relief payment exclusions (after December 31, 2025, and before January 1, 2031).

119th Congressin committeeS. 3372(In Committee)Official page

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Includes provisions on preamble, short title., and 2 more.

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