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

This bill, formally titled 'A BILL To amend the Internal Revenue Code of 1986 to codify and extend the rules for personal casualty losses arising from major disasters and the rules for the exclusion from gross income of compensation for losses or damages resulting from certain wildfires,' aims to modify the Internal Revenue Code. The bill intends to codify and extend existing rules regarding personal casualty losses stemming from major disasters. It also seeks to establish rules for excluding certain compensation related to wildfire losses from gross income.

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 Section 165(h) of the Internal Revenue Code of 1986 to establish a special rule for qualified disaster losses. It defines 'qualified net disaster loss' as the excess of qualified disaster-related personal casualty losses over personal casualty gains. A 'qualified disaster area' is defined as an area where the President has declared a major disaster 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 for losses to which paragraph (3) applies). 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, due to 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 prevents individuals from taking deductions or credits for expenditures covered by the excluded payments and prevents increases in property basis due to the excluded amounts. The amendments apply to payments received in taxable years beginning after December 31, 2025.

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Federal Disaster Tax Relief Act of 2025

Last updated: 9/9/2025 · Introduced: 9/9/2025

Author: Rick Scott (R-FL)

TL;DR (AI)

This bill increases the deduction limit for qualified disaster losses to $100 (or $500 for certain losses) and includes this deduction as part of the standard deduction.
The bill establishes a new tax exclusion for 'qualified wildfire relief payments,' preventing recipients from including these payments in their gross income or taking related deductions.
It defines specific criteria for 'qualified disaster areas' and 'qualified wildfire disasters' to determine eligibility for these tax benefits, applying them to events declared between specified dates.

119th Congressin committeeHR. 5225(In Committee)Official page

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Other Sections

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

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