WASHINGTON, D.C. – Americans rebuilding after wildfires, hurricanes, floods, and other disasters will keep getting fairer tax treatment, thanks to the Doug LaMalfa Federal Disaster Tax Relief Certainty Act (H.R. 5366) – bipartisan legislation introduced by Ways and Means Committee members Representatives Greg Steube (FL-17), Mike Thompson (CA-04), and Jimmy Panetta (CA-19), and signed into law by President Trump. The bill is named in honor of the late Representative Doug LaMalfa (CA-01), who championed disaster tax relief for years.

Previously, taxpayers hit by a federally declared disaster could generally only deduct personal casualty losses if they itemized, and only to the extent those losses exceeded 10 percent of their adjusted gross income. The law now lets disaster victims deduct qualified losses above $500 per disaster without itemizing and removes the 10 percent adjusted gross income threshold for those losses. It also extends an exclusion from gross income for wildfire relief payments, so survivors are not taxed on compensation meant to help them rebuild.

Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement:

“Thanks to bipartisan leadership in Congress and President Trump, disaster victims now have the certainty they need to rebuild their lives. Families who lose their homes to a wildfire or a hurricane should not also lose a sizable piece of their recovery resources to the IRS. I commend Congressman Steube for his tireless efforts to see this bill across the finish line, and I want to recognize our late colleague Doug LaMalfa, whose years of advocacy for disaster victims in California made this law possible.”

Representative Steube (FL-17) issued the following statement:

“We delivered long-overdue certainty to Americans rebuilding after natural disasters. Disaster victims should be focused on rebuilding their homes, businesses, and communities, not worrying about an unexpected tax burden on the assistance they receive. I’m grateful to President Trump for signing this important legislation into law and ensuring families across the country receive the relief they deserve. Congressman LaMalfa worked tirelessly to get this legislation across the finish line, and it is fitting that his legacy of service will live on for years to come.”

H.R. 5366 was approved by the Ways and Means Committee by a unanimous vote of 43 to 0, passed the House of Representatives by voice vote, and passed the Senate by unanimous consent.

H.R. 5366, the Doug LaMalfa Federal Disaster Tax Relief Certainty Act

• Extends a more generous treatment of personal casualty losses to disasters that occur prior to January 1, 2027.
  • Previously, taxpayers could deduct personal casualty losses, subject only to minor limitations, for disasters that occurred between December 28, 2019, and July 4, 2025. However, that rule expired for disasters occurring after July 4, 2025, meaning fewer disaster victims were eligible for a deduction for their disaster-related losses.
• Excludes wildfire relief payments from taxable income regardless of when they are received, so long as the wildfire disaster declaration occurs after December 31, 2014, and before January 1, 2027. Previously, such payments were required to have been received by December 31, 2025, to qualify for this exclusion.
• As a result of this legislation, more taxpayers who have been harmed by disasters and wildfires will be eligible for these tax benefits.
• The Joint Committee on Taxation estimates the law will provide $408 million in tax relief over the 2026 to 2036 period.

Read a fact sheet on the bill here.