Title 26 — Internal Revenue CodeRelease 119-73
§139 Disaster Relief Payments
Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter B— Computation of Taxable Income › Part III— ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME › § 139
Summary
Money you receive as a qualified disaster relief payment is tax-free — you do not count it as income. This covers payments that reimburse reasonable and necessary personal, family, living, or funeral costs caused by a qualified disaster; costs to repair or rebuild your home or replace its contents after the disaster; payments from a common carrier (like an airline) because of death or physical injury in the disaster; and general-welfare payments from a federal, state, or local government tied to the disaster. A qualified disaster includes a terrorist or military action, a federally declared disaster, a catastrophic accident involving a common carrier, or a disaster a government determines warrants assistance. These payments also do not count as wages or self-employment earnings, so no payroll or self-employment tax applies. Hazard mitigation payments under the Stafford Act or National Flood Insurance Act are tax-free too. The trade-off: you cannot also take a deduction or credit for expenses covered by tax-free payments, and the exclusion does not apply to anyone the Attorney General identifies as a participant in a terrorist action.
Full Legal Text
Title 26, §139
Internal Revenue Code — Source: USLM XML via OLRC
(a)Gross income shall not include any amount received by an individual as a qualified disaster relief payment.
(b)For purposes of this section, the term “qualified disaster relief payment” means any amount paid to or for the benefit of an individual—
(1)to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster,
(2)to reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster,
(3)by a person engaged in the furnishing or sale of transportation as a common carrier by reason of the death or personal physical injuries incurred as a result of a qualified disaster, or
(4)if such amount is paid by a Federal, State, or local government, or agency or instrumentality thereof, in connection with a qualified disaster in order to promote the general welfare,
(c)For purposes of this section, the term “qualified disaster” means—
(1)a disaster which results from a terroristic or military action (as defined in section 692(c)(2)),
(2)a federally declared disaster (as defined by section 165(i)(5)(A)),
(3)a disaster which results from an accident involving a common carrier, or from any other event, which is determined by the Secretary to be of a catastrophic nature, or
(4)with respect to amounts described in subsection (b)(4), a disaster which is determined by an applicable Federal, State, or local authority (as determined by the Secretary) to warrant assistance from the Federal, State, or local government or agency or instrumentality thereof.
(d)For purposes of chapter 2 and subtitle C, qualified disaster relief payments and qualified disaster mitigation payments shall not be treated as net earnings from self-employment, wages, or compensation subject to tax.
(e)Subsections (a), (f), and (g) shall not apply with respect to any individual identified by the Attorney General to have been a participant or conspirator in a terroristic action (as so defined), or a representative of such individual.
(f)Gross income shall not include any amount received as payment under section 406 of the Air Transportation Safety and System Stabilization Act.
(g)(1)Gross income shall not include any amount received as a qualified disaster mitigation payment.
(2)For purposes of this section, the term “qualified disaster mitigation payment” means any amount which is paid pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (as in effect on the date of the enactment of this subsection) or the National Flood Insurance Act (as in effect on such date) to or for the benefit of the owner of any property for hazard mitigation with respect to such property. Such term shall not include any amount received for the sale or disposition of any property.
(3)Notwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with respect to such property.
(h)Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed (to the person for whose benefit a qualified disaster relief payment or qualified disaster mitigation payment is made) for, or by reason of, any expenditure to the extent of the amount excluded under this section with respect to such expenditure.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
section 406 of the Air Transportation Safety and System Stabilization Act, referred to in subsec. (f), is section 406 of Pub. L. 107–42, which is set out as a note under section 40101 of Title 49, Transportation. The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (g)(2), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, which is classified principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see
Short Title
note set out under section 5121 of Title 42 and Tables. The date of the enactment of this subsection, referred to in subsec. (g)(2), is the date of enactment of Pub. L. 109–7, which was approved Apr. 15, 2005. The National Flood Insurance Act, referred to in subsec. (g)(2), probably means the National Flood Insurance Act of 1968, title XIII of Pub. L. 90–448, Aug. 1, 1968, 82 Stat. 572, which is classified principally to chapter 50 (§ 4001 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see
Short Title
note set out under section 4001 of Title 42 and Tables.
Prior Provisions
A prior section 139 was renumbered section 140 of this title.
Amendments
2018—Subsec. (c)(2). Pub. L. 115–141, § 401(b)(10)(A), substituted “section 165(i)(5)(A)” for “section 165(h)(3)(C)(i)”. Pub. L. 115–141, § 401(a)(41), substituted “a federally” for “federally”. 2008—Subsec. (c)(2). Pub. L. 110–343 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “a Presidentially declared disaster (as defined in section 1033(h)(3)),”. 2005—Subsec. (d). Pub. L. 109–7, § 1(a)(2)(A), substituted “qualified disaster relief payments and qualified disaster mitigation payments” for “a qualified disaster relief payment”. Subsec. (e). Pub. L. 109–7, § 1(a)(2)(B), substituted “, (f), and (g)” for “and (f)”. Subsecs. (g), (h). Pub. L. 109–7, § 1(a)(1), added subsecs. (g) and (h).
Statutory Notes and Related Subsidiaries
Effective Date
of 2008 AmendmentAmendment by Pub. L. 110–343 applicable to disasters declared in taxable years beginning after Dec. 31, 2007, see section 706(d)(1) of Pub. L. 110–343, set out as a note under section 56 of this title.
Effective Date
of 2005 Amendment Pub. L. 109–7, § 1(c)(1), Apr. 15, 2005, 119 Stat. 22, provided that: “The
Amendments
made by subsection (a) [amending this section] shall apply to amounts received before, on, or after the date of the enactment of this Act [Apr. 15, 2005].”
Effective Date
Pub. L. 107–134, title I, § 111(c), Jan. 23, 2002, 115 Stat. 2433, provided that: “The
Amendments
made by this section [enacting this section and renumbering former section 139 as section 140 of this title] shall apply to taxable years ending on or after September 11, 2001.”
Savings Provision
For provisions that nothing in amendment by section 401(b)(10)(A) of Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 139
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73