Big News for Disaster Survivors: New Federal Tax Relief Law Offers Expanded Benefits
In a landmark development, the recently signed Federal Disaster Tax Relief Act provides critical tax relief for survivors of federally declared disasters dating back to December 2020. This comprehensive legislation extends financial support to those impacted by disasters such as Hurricanes Milton, Helene, Debby, Ian, Idalia, Nicole, and Fiona, offering much-needed relief to rebuild lives and communities.
The law introduces major changes to how disaster-related losses can be claimed on taxes. Americans affected by these disasters can now claim losses without needing to itemize their deductions, simplifying the process for countless families. Moreover, the previous requirement for losses to exceed 10% of a claimant’s adjusted gross income has been waived, making it easier for survivors to qualify for relief.
In another critical update, civil settlements for disaster victims are now tax-free, allowing families to retain the full amount of their compensation without worrying about additional tax burdens.
If you suffered damages from federally declared disasters between 2021 and 2024, you may be eligible for these benefits. Taxpayers are encouraged to consult with tax professionals to file amended returns for 2021–2023 or to include 2024 disaster losses on their current year's tax return.
For more information on disaster tax relief, visit the IRS website: IRS Disaster Tax Relief.
This significant legislation represents a major step forward in supporting disaster survivors, helping them recover more quickly and retain essential financial resources in times of need.
