SENATE PASSES THOMPSON’S BILL EXTENDING TAX RELIEF FOR WILDFIRE SURVIVORS

Washington, D.C. - On Friday, the Senate unanimously passed Rep. Mike Thompson (D-CA-04), Rep. Greg Steube (R-FL-17), Rep. Jimmy Panetta (D-CA-19), Senator Alex Padilla (D-CA), and Senator Adam Schiff's (D-CA) Doug LaMalfa Federal Disaster Tax Relief Certainty Act (H.R. 5366) to ensure wildfire survivors are not taxed on compensation they receive for losses and damages suffered during a federally declared wildfire disaster before January 1, 2027. This bill extends Thompson and Steube's landmark 2024 law providing tax relief for individuals impacted by federally declared disasters.

"Fire survivors have been through enough in the wake of losing their homes and livelihoods to wildfires. It's wrong to tax them on the settlement money meant to help them rebuild their lives," said Representative Thompson. "Our bill ensures that survivors of disasters in the near future don't have to come to Congress asking for relief after every fire, flood, hurricane, or other disaster. I'm thankful to Senator Padilla and our colleagues who voted to pass this bill."

"After a fire takes your home, the last thing families and communities should have to think about is a tax bill on the very settlement meant to help them rebuild. In 2024, we passed the original Protect Innocent Victims of Taxation After Fire Act that fixed our outdated tax code to remove this unfair financial burden, but that provision expired at the end of last year - even as survivors of the Los Angeles fires are still working to rebuild," said Senator Alex Padilla. "With devastating wildfires on the rise, I'm proud to get this commonsense, bipartisan solution over the finish line so survivors aren't left waiting, worrying, and wondering about their financial futures after disaster. We must continue working to make this exemption permanent."

"Surviving a natural disaster can place an enormous financial burden on families. That's why it's critical we support victims of devastating disasters like the wildfires in California and across the country. I'm proud that this bipartisan effort with my colleagues Senator Rick Scott and Representatives Greg Steube, Mike Thompson, and Jimmy Panetta has advanced through Congress. We need to ensure that those hit the hardest when disaster strikes receive the support and the tax relief they need to recover. And in getting this bill to the President's desk, we affirm a vital part of the late Doug LaMalfa's legacy," said Senator Adam Schiff.

BACKGROUND

Rep. Thompson serves as the Ranking Member of the Subcommittee on Tax for the Ways and Means Committee. He introduced the original legislation with Rep. Doug LaMalfa in the House of Representatives to provide tax relief to PG&E fire victims in the 117th Congress and worked with Senator Padilla and Rep. LaMalfa to advance the legislation.

In 2024, Rep. Thompson and Rep. Steube led a bipartisan group of 218 Members of Congress to successfully advance a discharge petition which forced House Speaker Mike Johnson to bring the Federal Disaster Tax Relief Act of 2023 to the House floor for a vote. The historic advancement of Rep. Thompson and Rep. Steube's petition marked only the third time a House discharge petition had succeeded in the 21st Century. The bill passed the Senate by unanimous consent and was signed into law by President Biden in December of 2024.

H.R. 5366, originally introduced as the Federal Disaster Tax Relief Act of 2025 and later renamed in honor of the late Congressman Doug LaMalfa, builds upon Rep. Thompson's landmark law by codifying and extending disaster tax relief provisions through January 1, 2027. The bill allows individuals to deduct disaster-related losses more easily, including for those who do not itemize, and ensures wildfire relief payments are not treated as taxable income. Read the full bill text here.