Doug LaMalfa Federal Disaster Tax Relief Certainty Act
- Bill Number
- H.R. 5366
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Passed House
- Latest Action
- 2026-04-28: Received in the Senate and Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-11T23:41:32Z
AI-Generated Summary
Doug LaMalfa Federal Disaster Tax Relief Certainty Act (H.R. 5366)
Purpose
To permanently codify and extend tax relief rules in the Internal Revenue Code (IRC) for personal casualty losses from major federally declared disasters and to exclude certain compensation received for wildfire-related losses or damages from taxable income. This provides ongoing certainty for disaster victims by replacing temporary provisions with standard code language, covering disasters through 2027.
Key Provisions
Casualty Loss Deductions for Major Disasters (Section 2)
- Special Rule for Qualified Net Disaster Losses: Individuals can deduct qualified net disaster losses (excess of disaster-related personal casualty losses over certain gains) without the usual 10% of adjusted gross income (AGI) threshold. The 10% threshold applies only to non-disaster losses.
- Applies to losses in a qualified disaster area (area with a major disaster declaration by the President under the Stafford Act, incident period from December 28, 2019, to January 1, 2027).
- Lowered Floor Amount: General per-loss floor reduced to $100 (previously $100 after 2009, $500 before); remains $500 for qualified disaster losses.
- Above-the-Line Deduction: Non-itemizers (those taking the standard deduction) can now deduct qualified net disaster losses directly from income.
- Effective Date: Tax years beginning after December 31, 2024; supersedes prior temporary laws.
Exclusion for Wildfire Compensation (Section 3)
- Tax-Free Payments: Excludes qualified wildfire relief payments from gross income.
- Covers compensation for losses, expenses, or damages (e.g., extra living costs, lost wages not from employers, personal injury, emotional distress) from a qualified wildfire disaster (federally declared forest/range fire disaster from after December 31, 2014, to before January 1, 2027), if not covered by insurance.
- No Double Benefits: Prevents claiming deductions, credits, or property basis increases for amounts already excluded.
- Effective Date: Payments received in tax years beginning after December 31, 2025.
Significant Changes to Existing Law
- Codifies Temporary Rules: Moves disaster-specific casualty loss relief (previously in short-term laws like the 2020 Taxpayer Certainty Act) into permanent IRC sections 165(h) and new 139M.
- Expands Access: Allows non-itemizers to claim disaster loss deductions; adjusts loss floors favorably for disasters.
- Time-Limited Extension: Covers disasters up to 2027, providing multi-year certainty beyond one-off extensions.
Potential Impacts
- Citizens: Reduces tax burden for disaster victims by easing deductions and excluding relief payments, helping recovery (e.g., faster refunds, no tax on aid).
- Government Agencies: IRS must administer new rules, potentially increasing processing for disaster claims but standardizing procedures.
- No International Relations Impact: Purely domestic tax policy.
Main Stakeholders Affected
- Individuals in Disaster Areas: Primary beneficiaries, especially wildfire and major disaster victims (e.g., homeowners, renters with property losses).
- Taxpayers Generally: Non-itemizers gain new deduction option; others see clarified rules.
- IRS and Treasury: Responsible for implementation, guidance, and enforcement.
- State/Local Governments: Indirectly aided via faster individual recovery in affected communities.
Notable Legal, Constitutional, or Political Implications
- Legal: Ensures consistency in tax treatment, reducing litigation over temporary rules; denial of double benefit prevents abuse.
- Constitutional: No apparent issues; standard congressional authority over tax code.
- Political: Named after Rep. Doug LaMalfa (likely representing wildfire-prone areas); promotes "certainty" in disaster tax relief, potentially bipartisan appeal in disaster-vulnerable regions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Steube, W. Gregory [R-FL-17]
Cosponsors (14)
Rep. Thompson, Mike [D-CA-4], Rep. LaMalfa, Doug [R-CA-1], Rep. Panetta, Jimmy [D-CA-19], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Neguse, Joe [D-CO-2], Rep. Min, Dave [D-CA-47], Rep. Crow, Jason [D-CO-6], Rep. Tokuda, Jill N. [D-HI-2], Rep. Donalds, Byron [R-FL-19], Rep. Bilirakis, Gus M. [R-FL-12], Rep. Diaz-Balart, Mario [R-FL-26], Rep. Moore, Gwen [D-WI-4], Rep. Bergman, Jack [R-MI-1], Rep. Wilson, Joe [R-SC-2]
Recent Actions
- 2026-04-28: Received in the Senate and Read twice and referred to the Committee on Finance.
- 2026-04-27: Motion to reconsider laid on the table Agreed to without objection.
- 2026-04-27: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H3107-3108)
- 2026-04-27: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H3107-3108)
- 2026-04-27: DEBATE - The House proceeded with forty minutes of debate on H.R. 5366.
- 2026-04-27: Considered under suspension of the rules. (consideration: CR H3107-3110)
- 2026-04-27: Mr. Smith (MO) moved to suspend the rules and pass the bill, as amended.
- 2026-04-09: Placed on the Union Calendar, Calendar No. 525.
- 2026-04-09: Reported (Amended) by the Committee on Ways and Means. H. Rept. 119-605.
- 2026-04-09: Reported (Amended) by the Committee on Ways and Means. H. Rept. 119-605.
- 2026-03-25: Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 43 - 0.
- 2026-03-25: Committee Consideration and Mark-up Session Held
- 2025-09-15: Referred to the House Committee on Ways and Means.
- 2025-09-15: Introduced in House
- 2025-09-15: Introduced in House
Bill Versions
- Doug LaMalfa Federal Disaster Tax Relief Certainty Act — issued 2026-04-27 — PDF (10 pages)
- Federal Disaster Tax Relief Act of 2025 — issued 2025-09-15 — PDF (8 pages)
- Doug LaMalfa Federal Disaster Tax Relief Certainty Act — issued 2026-04-28 — PDF (8 pages)
- Doug LaMalfa Federal Disaster Tax Relief Certainty Act — issued 2026-04-09 — PDF (10 pages)