Tax Relief for Wildfire Victims: Compensation Excluded from Income
This bill aims to exclude compensation received by individuals for losses or damages resulting from qualified wildfire disasters from their gross income. This means that money received for expenses like additional living costs, lost wages, personal injury, or emotional distress will not be subject to income tax. This allows victims to fully utilize the support received to rebuild their lives without a tax burden.
Key points
Compensation for losses from qualified wildfire disasters (after 2014) will be excluded from gross income.
This includes additional living expenses, lost wages (not from employer), personal injury, death, or emotional distress.
No double benefits: deductions or basis increases are not allowed for expenses covered by excluded payments.
The exclusion applies to amounts received after December 31, 2025, but terminates for amounts received after December 31, 2032.
Status:
Introduced
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