Federal Disaster Tax Relief Act of 2025

This bill changes federal tax rules for people who lose personal property in major disasters. For disasters declared by the President with incident periods starting after July 4, 2025, and before January 1, 2027, individuals could deduct qualified disaster losses without the usual 10 percent of income threshold, and could add this deduction to the standard deduction instead of itemizing. The bill also sets the per-loss reduction at $100, or $500 for certain net disaster losses, and excludes the disaster loss deduction from the alternative minimum tax adjustment. Separately, payments individuals receive as compensation for losses from federally declared wildfire disasters after 2014 would not count as taxable income for tax years 2026 through 2030, as long as the losses were not otherwise covered by insurance.

Full text and official record on Congress.gov

Sponsors

• Rick Scott Republican sponsor
• 4 cosponsors