On September 11, Congressman Doug LaMalfa (R-Richvale) introduced the Protect Innocent Victims of Taxation After Fire Extension Act (H.R. 5225). Joining him on this legislation are Representatives Mike Thompson (D-St. Helena), Tom McClintock (R-Elk Grove), Tom Sherman (D-Sherman Oaks), Cliff Bentz (R-Oregon), and Janelle Bynum (D-Oregon).
The legislation builds on the law passed in December 2024 as part of the Federal Disaster Tax Relief Act (Public Law 118-148), which ensures wildfire survivors aren’t taxed on payments meant to cover their certain disaster losses or costs, including living expenses, lost wages, or compensation for injury, death, or emotional distress, if the fire was declared a federal disaster between 2020 and 2025.
This new bill extends that same protection through 2032 and allows victims to claim the exemption in the year they receive payments, instead of having to amend prior tax returns and wait for IRS refunds.
For additional information, contact RCRC Senior Policy Advocate, Staci Heaton.