U.S. Rep. Vince Fong (R-CA) led the introduction of bipartisan legislation on March 5 that would permanently exempt wildfire relief payments made to victims from federal income taxation through 2032.
The bill, the Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act, H.R. 7825, was introduced in memory of the late Rep. Doug LaMalfa (R-CA). If enacted, it would extend protections established under the Federal Disaster Tax Relief Act of 2023 through 2032. Without the extension, wildfire victims would again face federal income tax obligations on relief payments covering living expenses, lost wages, personal injury, death, or emotional distress.
“After these disasters strike in our community, survivors shouldn’t have to worry about whether they will have to pay burdensome federal taxes as they work to recover and rebuild,” Rep. Fong said. “Doug was a steadfast champion of rural California; it is an honor to continue his legacy and reintroduce this legislation in his memory so we can provide a lifeline to families as they navigate the most difficult of times.”
U.S. Rep. Blake Moore (R-UT), a cosponsor of the bill, echoed the sentiment. “After a catastrophic fire destroys their homes and livelihoods, the last thing wildfire victims should worry about is whether they will have to pay taxes on the disaster aid they receive to rebuild and recover,” Rep. Moore said. “I am proud to reintroduce this bill, aptly named after my friend and a champion for rural Americans.”
Rep. Cliff Bentz (R-OR) and Rep. Janelle Bynum (D-OR) were also among the bipartisan group of cosponsors.
“The horrific wildfires in the West have cost families their property, homes, and in some cases, their jobs,” said Rep. Bentz. “Until late last year, the United States Tax Code added insult to injury by taxing settlement funds meant for recovery. People who lose their homes and wages due to wildfire should not be taxed on the funds they received as result of these disasters. By extending such protections through 2032, we are helping victims get at least a little closer to recovery from their losses.”