The U.S. House of Representatives unanimously passed legislation that exempts wildfire relief payments made to victims from federal income tax.
The bill is called the Doug LaMalfa Federal Disaster Tax Relief Certainty Act, which was named after the late California Representative Doug LaMalfa. The Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act, sponsored by Reps. Blake Moore (R-UT) and Vince Fong (R-CA), was incorporated into the bill.
Other original co-sponsors include Reps. Tom McClintock (R-CA), Brad Sherman (D-CA), Mike Thompson (D-CA), Cliff Bentz (R-OR), Janelle Bynum (D-OR), and Jill Tokuda (D-HI).
“After a catastrophic fire destroys their homes and livelihoods, the last thing wildfire victims should worry about is whether they will have to pay taxes on the disaster aid they receive to rebuild and recover,” Moore said. “I am thrilled to see the Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act, aptly named after my friend and a champion for rural Americans, pass the House. This bill extends support for wildfire victims and ensures their recovery payments are exempt from federal taxes.”
This bill allows wildfire victims to exempt disaster aid incurred from a qualified wildfire disaster payment from gross income filings. This excludes wildfire recovery payments, including compensation that covers living expenses, lost wages, personal injury, death, or emotional distress, from federal income taxation.
“In California, we are all too familiar with the devastation caused by wildfires,” Fong said. “After these disasters strike in our community, survivors shouldn’t have to worry about whether they will have to pay burdensome federal taxes as they work to recover and rebuild. Doug was a steadfast champion of rural California; it is an honor to continue his legacy and further this legislation in his memory so we can provide a lifeline to families as they navigate the most difficult of times.”
LaMalfa passed away earlier this year after serving in Congress for 13 years in Californiaʻs first district.
“Californians are all too familiar with the devastation caused by wildfires. In the wake of losing their homes and livelihoods, it is wrong to tax survivors on settlement money that is meant to help them rebuild their lives. Survivors can’t afford to wait around for retroactive relief,” Thompson said. “Our late colleague Doug LaMalfa knew this well. I was proud to work with him to pass tax relief for fire victims in our communities in 2024, and I am proud we passed this bill now to honor his work and to extend our tax relief so more victims can be compensated.”
The bill will now moves to the Senate for consideration.
“When wildfire survivors are trying to rebuild after a massive tragedy, the federal government shouldn’t be taking a cut of their relief,” Bynum said. “This bipartisan bill ensures that survivors aren’t taxed on the money meant to help them pick up the pieces. Now, we’re one step closer to doing right by wildfire survivors.”