To amend the Internal Revenue Code of 1986 to increase the dollar threshold applicable to information reporting with respect to payments for qualified natural disaster expenses.
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
The Natural Disaster Property Protection Act raises the IRS reporting threshold from $600 to $5,000 for payments made to contractors for natural disaster-related work. Currently, property owners must file Form 1099 tax forms for any contractor payment over $600. This bill creates an exemption specifically for disaster mitigation (like installing flood barriers or storm-proofing) and disaster repair work (like fixing hurricane or wildfire damage).
Who Benefits and How
Property owners benefit by avoiding paperwork when hiring contractors for disaster-related work under $5,000. Instead of filing tax forms for every medium-sized contractor payment, they only need to report payments exceeding the new $5,000 threshold. Construction contractors, roofing companies, and property restoration firms also benefit significantly - they receive fewer 1099 forms to track and reconcile, reducing their administrative burden. Small contractors performing disaster mitigation and repair work under $5,000 face less tax reporting overhead.
Who Bears the Burden and How
The IRS and Treasury Department face reduced visibility into contractor payments for disaster-related work. With less information reporting data, the agencies have fewer tools to verify that contractors are properly reporting their income, potentially making tax enforcement more difficult. This could lead to reduced tax revenue if some contractors underreport income from disaster-related jobs.
Key Provisions
- Amends Section 6041 of the Internal Revenue Code to raise the 1099 reporting threshold from $600 to $5,000 for "qualified natural disaster expenses"
- Defines qualified natural disaster expenses as costs to mitigate risks from natural disasters or extreme weather (preventive work) OR repair damage from natural disasters or extreme weather (restorative work)
- Applies to work on real property only - covers both residential and commercial buildings
- Takes effect for payments made after the bill's enactment date
- Also amends Section 6041A to ensure broker reporting follows the same higher threshold
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.
At a Glance
What This Bill Does
Raises the IRS information reporting threshold from $600 to $5,000 for payments related to natural disaster mitigation and repair expenses on real property
Who Benefits
- Property owners hiring disaster mitigation/repair contractors
- Contractors and construction companies performing disaster-related work under $5,000
- Small contractors avoiding 1099 reporting paperwork
Who Bears Costs
- IRS (reduced information for tax enforcement)
- Treasury Department (less data on contractor payments)
Key Policy Areas
Taxation, Disaster Relief, Administrative Compliance
Primary Purpose
Raises the IRS information reporting threshold from $600 to $5,000 for payments related to natural disaster mitigation and repair expenses on real property
Policy Domains
Legislative Strategy
"Reduce administrative burden for property owners and contractors by raising reporting thresholds specifically for disaster-related work"
Identified Gains
- Property owners hiring disaster mitigation/repair contractors
- Contractors and construction companies performing disaster-related work under $5,000
- Small contractors avoiding 1099 reporting paperwork
Identified Costs
- IRS (reduced information for tax enforcement)
- Treasury Department (less data on contractor payments)
Sponsors
Legislative Progress
IntroducedMs. Pettersen (for herself and Mr. LaMalfa) introduced the following …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Contractors performing natural disaster mitigation work (roofing, weatherproofing, flood barriers), Contractors performing natural disaster repair work on residential and commercial property, Property restoration and remediation service providers
Property owners paying for natural disaster mitigation or repair services
IRS and Treasury Department (reduced information reporting data for tax enforcement)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
An expense incurred to mitigate the risk posed to real property by natural disasters or extreme weather, OR an expense incurred to repair damage done to real property by natural disasters or extreme weather
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology