Congress expands tax deductions for homeowners hit by disasters
H.R. 481 — Protecting Homeowners from Disaster Act of 2025 · Filed by Julia Brownley (D-CA) · 1 cosponsor · Introduced Jan 16, 2025 · Referred to committee
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What it does
This bill repeals a tax rule that currently limits homeowners' ability to deduct personal casualty losses (damage from disasters like floods, fires, or storms) on their federal income taxes. Under current law, homeowners can only deduct casualty losses that exceed 10% of their adjusted gross income and only if total losses exceed $100 per incident. The bill removes this limitation entirely, allowing homeowners to deduct more disaster-related losses starting in 2025.
Why we flagged it
The bill's sole operative mechanism is a tax deduction expansion for homeowners suffering casualty losses. It is a straightforward tax relief measure with no hidden riders or cross-purposes.
What the text implies
- The repeal applies retroactively to losses sustained after December 31, 2024, meaning homeowners may be able to amend prior-year returns to claim larger deductions if this bill passes.
- Removing the 10% AGI floor and $100 threshold may increase the federal tax revenue cost significantly in disaster years, as the Joint Committee on Taxation would need to score the revenue impact.
The full analysis lists 3 implications of this text.
Who stands to gain
homeowners (individual taxpayers); disaster-affected households