Federal Disaster Tax Relief Act of 2023

To provide tax relief with respect to certain Federal disasters. 1. Short title This Act may be cited as the Federal Disaster Tax Relief Act of 2023 2. Extension of rules for treatment of certain disaster-related personal casualty losses For purposes of applying section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, section 301 of such Act shall be applied by substituting the Federal Disaster Tax Relief Act of 2023 this Act 3. Exclusion from gross income for compensation for losses or damages resulting from certain wildfires (a) In general For purposes of the Internal Revenue Code of 1986, gross income shall not include any amount received by an individual as a qualified wildfire relief payment. (b) Qualified wildfire relief payment For purposes of this section— (1) In general The term qualified wildfire relief payment (2) Qualified wildfire disaster The term qualified wildfire disaster section 165(i)(5)(A) (c) Denial of double benefit Notwithstanding any other provision of the Internal Revenue Code of 1986— (1) no deduction or credit shall be allowed (to the person for whose benefit a qualified wildfire relief 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, and (2) 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. (d) Limitation on application This section shall only apply to qualified wildfire relief payments received by the individual during taxable years beginning after December 31, 2019, and before January 1, 2026. 4. East Palestine disaster relief payments (a) Disaster relief payments to victims of East Palestine train derailment East Palestine train derailment payments shall be treated as qualified disaster relief payments for purposes of section 139(b) (b) East Palestine train derailment payments For purposes of this section, the term East Palestine train derailment payment (1) a Federal, State, or local government agency, (2) Norfolk Southern Railway, or (3) any subsidiary, insurer, or agent of Norfolk Southern Railway or any related person. (c) Train derailment For purposes of this section, the term East Palestine train derailment (d) Effective date This section shall apply to amounts received on or after February 3, 2023. January 16, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Summary: Federal Disaster Tax Relief Act of 2023 This bill extends rules for the treatment of certain disaster-related personal casualty losses and provides tax relief for losses due to wildfires and a certain incident involving a train derailment. Specifically, the bill excludes from taxpayer gross income, for income tax purposes, any amount received by an individual taxpayer as compensation for expenses or losses incurred due to a qualified wildfire disaster (a disaster declared after 2014 as a result of a forest or range fire). It also excludes relief payments for losses resulting from the East Palestine, Ohio, train derailment on February 3, 2023.