§139M Compensation for Losses or Damages Resulting From Certain Wildfires

Summary

Money you get to cover losses, expenses, or damage from a federally declared forest or range fire (declared after December 31, 2014 and before January 1, 2027) is not counted as gross income, as long as the same losses aren’t already paid by insurance or another source. This can include payments for extra living costs, lost wages (except wages your employer would have paid anyway), physical injury, death, or emotional harm. You cannot claim the same tax benefit twice: if a wildfire payment is tax-free, you may not also take a deduction or credit for that expense, and you may not increase the tax basis of property by the amount that was excluded.