Disaster Mitigation and Tax Parity Act of 2025
Disaster Mitigation and Tax Parity Act of 2025
Plain Language Summary
# Disaster Mitigation and Tax Parity Act of 2025 – Summary **What the Bill Does:** This bill would allow homeowners to exclude certain disaster-prevention payments from their federal income taxes. Currently, people can exclude federal disaster relief payments from their taxable income, but they cannot do the same for similar payments from state-run disaster mitigation programs. This bill would create parity by letting homeowners exclude payments they receive from state programs designed to help them make home improvements that reduce disaster damage (like reinforcing roofs or improving drainage). **Who It Affects:** The bill primarily affects homeowners in states with disaster mitigation programs who receive financial assistance to make their homes more resilient to natural disasters.
It could also affect state governments that run these programs and the federal government's tax revenue. **Current Status:** The bill (HR 1849) is currently in committee and has not yet been voted on by the full House of Representatives. It was introduced by Representative Doug LaMalfa (R-CA) in the 119th Congress.
CRS Official Summary
Disaster Mitigation and Tax Parity Act of 2025This bill excludes from gross income, for federal income tax purposes, payments received from a state catastrophe loss mitigation program by an individual for the purpose of making improvements to the individual’s property that mitigate the impact of certain disasters.Under current law, individuals may exclude from gross income, for federal income tax purposes, payments received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) for hazard mitigation. (Some exceptions apply.) Further, under current law, such payments do not increase the basis of the property for which the payments are made.The bill allows a similar exclusion from gross income for certain payments received by an individual from a program established bya state (or any political subdivision or instrumentality of the state),a joint powers authority, oran entity that was established by the state to provide essential or basic property insurance and is regulated by the state.Under the bill, such payments must be for making improvements to the individual’s property for the sole purpose of reducing damage that would be done to the property by a windstorm, earthquake, flood, or wildfire.Finally, the bill provides that such payments from a state catastrophe loss mitigation program do not increase the basis of the property for which the payments are made.
Latest Action
ASSUMING FIRST SPONSORSHIP - Mr. Murphy asked unanimous consent that he may hereafter be considered as the first sponsor of H.R. 1849, a bill originally introduced by Representative LaMalfa, for the purpose of adding cosponsors and requesting reprintings pursuant to clause 7 of rule XII. Agreed to without objection.