This bill adds a new section (section 139M) to the Internal Revenue Code that says certain wildfire relief payments do not count as taxable income for individuals. It defines a "qualified wildfire relief payment" as money received to compensate for losses, expenses, or damages from a qualified wildfire disaster. Covered items can include additional living expenses, lost wages (with some exceptions), personal injury, death, and emotional distress, but only to the extent those losses are not paid for by insurance or other means. A "qualified wildfire disaster" means a federally declared disaster (as defined in current tax law) declared after December 31, 2014, that is the result of any forest or range fire. The bill also prevents a person from taking a tax deduction, credit, or increasing property basis for the same amounts that are excluded from income. The exclusion would not apply to amounts received after December 31, 2032. The rule applies to amounts received after December 31, 2025.
If you receive a qualifying wildfire relief payment (for example from a relief fund, charity, or government program) to cover losses or extra living costs caused by a covered wildfire, that money would not be included in your taxable income while this law is in effect. Payments covered by insurance or other compensation are not excluded. Payments meant to replace wages that come from your employer in place of wages you would have otherwise received are not treated as qualified wildfire relief payments under this bill. The exclusion is temporary and only applies for payments received between January 1, 2026 and December 31, 2032.
No publicly available information on federal cost estimates, revenue effects, or budget scoring is included in the bill text or the provided metadata.
The bill title and text indicate supporters want to prevent people who suffer losses from wildfires from having to pay income tax on relief payments that compensate those losses. The text aims to make relief payments tax-free and to prevent taxpayers from claiming a second tax benefit for the same loss.
No publicly available information on specific objections, opposing arguments, or stakeholders' views is included in the bill text or the provided metadata.