Protect Innocent Victims of Taxation After Fire Extension Act | ChamberLight
Bills · S 3372
IN COMMITTEE· 119TH CONGRESS
Senate BillS 3372Taxation
Protect Innocent Victims of Taxation After Fire Extension Act
INTRO DEC 4· LAST ACTION DEC 4
READING
2MIN
COSPONSORS
3BIPARTISAN
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8
Introduced
In Committee
Reported
Passed Senate
Passed House
Conference
To President
Became Law
WHAT THE BILL DOES
AI-written
Voters should care about this bill because it directly impacts the financial recovery of people affected by devastating wildfires. When individuals receive money to cover significant losses from a disaster, current tax rules might consider some of that money as taxable income, reducing the actual amount available for rebuilding and recovery.
If this bill becomes law, wildfire victims will be able to keep more of the compensation they receive, helping them to more fully recover from the financial strain of a disaster. If it doesn't pass, these payments could continue to be taxed, leaving victims with less money to address their losses and potentially slowing their ability to rebuild their lives and communities.
KEY PROVISIONS
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PROVISION 01
Excludes 'qualified wildfire relief payments' from an individual's gross income.
This provision directly reduces the tax burden on individuals who receive financial assistance due to wildfire damages.
PROVISION 02
Defines a 'qualified wildfire relief payment' to include compensation for various losses like living expenses, lost wages (with exceptions), personal injury, and emotional distress, as long as not compensated by insurance.
This clarifies exactly what types of payments will be considered tax-free, ensuring comprehensive relief for victims.
PROVISION 03
Applies the exclusion to payments received for federally declared wildfire disasters that occurred after December 31, 2014.
This makes the tax relief retroactive, benefiting a broader range of wildfire victims from past events.
PROVISION 04
Prevents individuals from claiming a double benefit, meaning they cannot take a deduction or credit for expenses covered by excluded relief payments, nor can they increase property basis for such amounts.
This ensures that individuals receive a tax benefit once, either through an income exclusion or a deduction/credit, but not both for the same expense.
Voters should care about this bill because it directly impacts the financial recovery of people affected by devastating wildfires. When individuals receive money to cover significant losses from a disaster, current tax rules might consider some of that money as taxable income, reducing the actual amount available for rebuilding and recovery.
If this bill becomes law, wildfire victims will be able to keep more of the compensation they receive, helping them to more fully recover from the financial strain of a disaster. If it doesn't pass, these payments could continue to be taxed, leaving victims with less money to address their losses and potentially slowing their ability to rebuild their lives and communities.
KEY PROVISIONS
AI-extracted
high
Excludes 'qualified wildfire relief payments' from an individual's gross income.
This provision directly reduces the tax burden on individuals who receive financial assistance due to wildfire damages.
med
Defines a 'qualified wildfire relief payment' to include compensation for various losses like living expenses, lost wages (with exceptions), personal injury, and emotional distress, as long as not compensated by insurance.
This clarifies exactly what types of payments will be considered tax-free, ensuring comprehensive relief for victims.
high
Applies the exclusion to payments received for federally declared wildfire disasters that occurred after December 31, 2014.
This makes the tax relief retroactive, benefiting a broader range of wildfire victims from past events.
med
Prevents individuals from claiming a double benefit, meaning they cannot take a deduction or credit for expenses covered by excluded relief payments, nor can they increase property basis for such amounts.
This ensures that individuals receive a tax benefit once, either through an income exclusion or a deduction/credit, but not both for the same expense.
The amendments made by this section shall apply to amounts received after December 31, 2025.
GLOSSARY
AI-written
Gross income
All income from whatever source derived, unless specifically excluded by law. This is the starting point for calculating your taxes.
Internal Revenue Code of 1986
The official body of U.S. federal tax law.
Qualified wildfire relief payment
Money received by an individual as compensation for losses, expenses, or damages due to a federally declared wildfire, not already covered by insurance.
Federally declared disaster
A disaster declared by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, qualifying for federal aid.
Exclusion
An amount of money or type of income that is specifically left out of taxable income calculations.
Deduction
An amount that can be subtracted from your gross income to lower your taxable income, reducing the amount of tax you owe.
Credit
An amount that directly reduces the amount of tax you owe, dollar for dollar, after your tax liability has been calculated.
ACTION TIMELINE
2 EVENTS
DEC 4, 25
Introduced in Senate
INTROREFERRAL
DEC 4, 25
Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure: CR S8514)
The cost of an asset for tax purposes, used to calculate gain or loss when the asset is sold. An increased basis means less taxable gain if you sell the property.
