Protect Innocent Victims of Taxation After Fire Extension Act

No income tax on wildfire relief payments

This bill would let you exclude wildfire relief payments from your taxable income. It would cover extra living costs, certain lost wages (not wages your employer would have paid), injuries, death, and emotional distress. The payment would have to be for a federally declared forest or range fire declared after December 31, 2014, and not covered by insurance or other pay. The exclusion would apply to payments you receive after December 31, 2025, and would end after December 31, 2032. If you exclude a payment, you would not also get a tax deduction or credit for the same costs, and you could not raise your property’s tax basis with the excluded amount.