The U.S Senate recently passed legislation that seeks to provide Americans with disaster tax relief.
The bill, the Doug LaMalfa Federal Disaster Tax Relief Certainty Act, was originally introduced in the House by Rep. Greg Steube (R-FL). The bill, H.R. 5366, passed in the House and then was approved by the Senate on Aug. 7. It now moves to the president’s desk to be signed into law.
This bill would extend the special rules consistent with recent disaster relief legislation for qualified disasters after July 4, 2025, and before January 1, 2027. The special rules include waiving the 10 percent adjusted gross income limitation, allowing qualified disaster losses to be added to the standard deduction, and raising the deduction floor from $100 to $500.
The legislation also extends the coverage period through the end of 2026 for the exclusion of qualified wildfire relief payments.
The passage of the bill in both chambers of Congress was applauded by the American Institute of CPAs (AICPA). The AICPA has long-advocated for policies and legislation that would provide clear, permanent and consistent tax relief to individuals and businesses impacted by natural disaster across the country.
“This legislation has a broader impact beyond closing the gap in disaster relief dating back to 2025. By codifying these provisions into the IRC, Congress is providing clarity to and ensuring consistency for taxpayers affected by federally declared disasters,” Daniel Hauffe, senior manager for tax policy and advocacy with the AICPA, said. “Although the bill ensures that disaster-related tax relief is readily findable and predictable, we urge Congress to pursue permanent relief to provide long-term certainty and avoid future gaps in relief for affected taxpayers.”
The 2024 legislation enacting this disaster relief covered payments received between 2020 and 2025 and extended the period of limitation for refund claims. However, notes AICPA, the limitations period extension was unnecessary in the bill because it extended the original disaster period by just one year.
Since 2021, the Federal Emergency Management Agency (FEMA) has declared more than 300 disasters impacting nearly every corner of the country, with 49 states experiencing a covered disaster. And since July 4, 2025, disasters across 34 states have exposed gaps in current law as key provisions expired.
“Americans shouldn’t face more uncertainty in the tax code after surviving a natural disaster,” Steube said back in March. “This bill ensures families recovering from hurricanes, wildfires, and other disasters can access clear, consistent disaster tax relief. Congressman LaMalfa spent years leading on this issue, and I’m proud to help carry that work forward.”
Unlike previous disaster tax relief bills, the AICPA noted that this bill is the first in many years to be prospective, where most are typically retroactive. Further, they said the bill introduces significant clarity by adding the disaster relief provisions to the Internal Revenue Code (IRC).