AICPA supports disaster tax bill, presses for permanent relief

The AICPA is supporting federal disaster relief legislation that awaits the president’s signature after Senate approval and urging Congress to provide permanent relief for victims.

The Doug LaMalfa Federal Disaster Tax Relief Certainty Act, H.R. 5366, would extend special disaster tax relief provisions for qualified disasters occurring after July 4, 2025, and before Jan. 1, 2027, and add those provisions to the Internal Revenue Code (IRC).

The bill would waive the 10%-of-adjusted-gross-income limitation, allow qualified disaster losses to be added to the standard deduction, and raise the deduction floor to $500 from $100.

“This legislation has a broader impact beyond closing the gap in disaster relief dating back to 2025. By codifying these provisions into the IRC, Congress is providing clarity to and ensuring consistency for taxpayers affected by federally declared disasters,” Daniel Hauffe, AICPA senior manager–Tax Policy & Advocacy, said in a news release.

The legislation also extends through the end of 2026 the exclusion of qualified wildfire relief payments. While most disaster relief bills are retroactive, this bill is the first in many years to be prospective, the AICPA release said.

“Although the bill ensures that disaster-related tax relief is readily findable and predictable, we urge Congress to pursue permanent relief to provide long-term certainty and avoid future gaps in relief for affected taxpayers,” Hauffe said.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.