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

H.R. 5366 would make it easier for you to claim disaster losses and would keep many wildfire relief payments out of your taxable income.

For federally declared major disasters, the bill creates a standing set of tax rules for losses tied to FEMA incident periods beginning on or after December 28, 2019, and before January 1, 2027. Instead of relying on Congress to pass one-off disaster tax packages, affected filers would use this broader framework.

One practical change is for people who do not itemize. If you take the standard deduction, you could still deduct a qualified net disaster loss under this bill. That matters because many households no longer itemize, which can make disaster relief harder to access under normal tax rules.

The bill also updates the casualty-loss thresholds. It uses a $100 floor for casualty losses generally, but a $500 floor for qualified disaster-related personal casualty losses, while still applying the income-based limit to other losses above 10% of adjusted gross income.

For wildfire survivors, the bill creates a new tax exclusion for certain compensation tied to federally declared forest or range fires declared after December 31, 2014, and before January 1, 2027. Covered payments can include money for temporary housing, lost wages that did not come from your employer, personal injury, death, and emotional distress—as long as those costs were not already covered by insurance.

If you received wildfire compensation for losses insurance did not cover, that money could stay out of your taxable income. But the bill also blocks double benefits: you could not exclude the payment from income and then also claim a deduction, credit, or higher property basis from the same dollars.