Yuba-Sutter Times

Today, President Biden signed into law the Federal Disaster Tax Relief Act, known as H.R. 5863. This new legislation incorporates Congressman Doug LaMalfa's bill, H.R. 4970, Protect Innocent Victims of Taxation After Fire Act. The act exempts wildfire relief payments from federal income taxes and simplifies the process for deducting losses from natural disasters.

Congressman LaMalfa expressed gratitude for the president's swift action: “After our visit with the president and Mrs. Biden at the White House Christmas Ball this week, I appreciate the President’s timely signature after his recent return from Africa on our important disaster tax relief bill,” he stated. He also acknowledged those who supported him and Congressman Thompson in getting the bill passed.

The act provides several benefits for wildfire survivors. It allows amended tax returns to be filed up to a year after enactment instead of being restricted to three years after initially filing a tax return. It protects recipients of these payments from losing benefits like Covered California premium subsidies and VA co-pay assistance due to misinterpretations of their disaster relief as income windfalls.

The estimated $512 million in taxes is expected to be returned to victims and survivors of wildfires. The provisions apply not only to Fire Victim Trust claimants but also to any wildfire payments received between 2020 and 2025 for federal wildfire disasters occurring after 2014.

Congressman Doug LaMalfa represents California’s First Congressional District, which includes Butte, Colusa, Glenn, Lassen, Modoc, Shasta, Siskiyou, Sutter, Tehama, and Yuba Counties.