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A bill to amend the Internal Revenue Code of 1986 to exclude from gross income amounts received from State-based catastrophe loss mitigation programs.
1/31/2025, 11:56 AM
Summary of Bill S 336
In simpler terms, this bill would ensure that individuals who receive financial assistance from state programs designed to help mitigate the impact of natural disasters, such as hurricanes, wildfires, or floods, would not have to pay taxes on those funds. This exemption would apply to any money received from these programs, whether it is for property damage, temporary housing, or other disaster-related expenses.
The goal of this bill is to provide relief to individuals who have been affected by natural disasters and to encourage participation in state-based mitigation programs. By excluding these funds from taxable income, the bill aims to make it easier for individuals to recover and rebuild after a disaster strikes. Overall, Bill 119 s 336 seeks to provide financial support to those in need during times of crisis and to promote resilience in the face of natural disasters.
Congressional Summary of S 336
Disaster Mitigation and Tax Parity Act of 2025
This 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 by
- a state (or any political subdivision or instrumentality of the state),
- a joint powers authority, or
- an 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.
