Federal Disaster Tax Relief Certainty Act Signed Into Law, Expanding Tax Relief for Disaster and Wildfire Victims

LOS ANGELES, CA, UNITED STATES, September 21, 2026 /EINPresswire.com/ — SingerLewak‘s Tax Advisory Group is informing taxpayers of important new federal tax relief provisions following the enactment of the Doug LaMalfa Federal Disaster Tax Relief Certainty Act (H.R. 5366). The legislation, passed by Congress in August and signed into law by President Donald Trump on September 11, 2026, expands tax relief opportunities for individuals affected by federally declared disasters and wildfires.

The new law provides two significant taxpayer-friendly changes designed to reduce the financial burden on individuals recovering from qualifying disasters.

Wildfire Relief Payments Excluded from Taxable Income

The legislation creates a new provision under Internal Revenue Code Section 139M, allowing individual taxpayers to exclude qualified wildfire relief payments from gross income. This provision applies to federally declared wildfire disasters occurring between 2015 and 2026.

Under the law, qualifying wildfire relief payments will not be subject to federal income tax regardless of when the payments are received, provided the wildfire disaster declaration occurred after December 31, 2014, and before January 1, 2027.

Expanded Deduction for Personal Casualty Losses

The Act also amends Internal Revenue Code Section 165(h) to provide broader tax relief for taxpayers who suffer disaster-related personal casualty losses.

Historically, taxpayers generally needed to itemize deductions and could only deduct casualty losses exceeding 10% of adjusted gross income (AGI). The new legislation extends favorable treatment for qualified net disaster losses by allowing taxpayers to deduct eligible personal casualty losses without being subject to the 10% AGI limitation.

This relief applies to federally declared disasters occurring between December 28, 2019, and December 31, 2026.

Key Provisions of H.R. 5366

The Doug LaMalfa Federal Disaster Tax Relief Certainty Act:

• Extends enhanced tax treatment for personal casualty losses related to qualified disasters occurring before January 1, 2027.

• Excludes qualified wildfire relief payments from taxable income for eligible wildfire disasters declared after December 31, 2014, and before January 1, 2027.

• Expands access to valuable tax benefits for taxpayers impacted by disasters and wildfires.

Increased Relief for Affected Taxpayers

The legislation is expected to provide meaningful financial assistance to individuals and families recovering from natural disasters by reducing taxable income and increasing access to casualty loss deductions. Taxpayers who have suffered losses due to federally declared disasters during the covered periods should evaluate whether they may qualify for these expanded tax benefits.

“These changes represent a significant expansion of federal tax relief for disaster victims and may create valuable tax-saving opportunities for eligible taxpayers,” said SingerLewak’s Tax Advisory Group. “Individuals affected by wildfires and other qualified disasters should review their circumstances carefully to determine whether they qualify under the new provisions.”

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Mike Mondelli
SingerLewak LLP
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Written By: EIN Presswire