To amend the Internal Revenue Code of 1986 to repeal the limitation on deductions for personal casualty losses.
Legislative Progress
IntroducedMs. Brownley introduced the following bill; which was referred to …
Summary
What This Bill Does
The Protecting Homeowners from Disaster Act of 2025 repeals a tax law restriction that currently limits personal casualty loss deductions to federally declared disasters. Under current law (enacted in the 2017 Tax Cuts and Jobs Act), homeowners can only deduct property losses on their federal taxes if the disaster was officially declared by the federal government. This bill removes that restriction, allowing taxpayers to deduct losses from any qualifying casualty event, including fires, storms, floods, theft, and other property damage, even if the federal government never declared it a disaster.
Who Benefits and How
Homeowners and property owners in disaster-prone areas benefit most directly. They can now claim tax deductions for losses from wildfires, floods, hurricanes, and other disasters that don't receive federal declarations - a common situation in states like California where many wildfires occur but don't always trigger federal disaster status. Victims of property theft or damage from non-disaster events (like car accidents, vandalism, or burst pipes) also benefit by being able to deduct these losses. Tax preparation services benefit from increased complexity in filing, as more taxpayers will need professional help calculating casualty loss deductions.
Who Bears the Burden and How
The U.S. Treasury bears the primary cost through reduced tax revenue, as more taxpayers claim larger deductions that lower their taxable income. This revenue loss will be borne collectively by all federal taxpayers through either increased deficits or the need to raise revenue elsewhere. Property and casualty insurance companies may face ambiguous effects - some homeowners might reduce their coverage knowing they can deduct uninsured losses, potentially reducing policy sales and premiums.
Key Provisions
- Strikes paragraph (5) from Section 165(h) of the Internal Revenue Code, removing the requirement that casualty losses must be from federally declared disasters to be tax-deductible
- Restores the pre-2018 tax treatment where any qualifying casualty loss (fire, storm, shipwreck, theft, or other sudden event) could be deducted regardless of federal disaster designation
- Applies to losses sustained in tax years beginning after December 31, 2024, meaning it would take effect for the 2025 tax year
- Requires taxpayers to still meet other existing requirements for casualty loss deductions, including itemizing deductions rather than taking the standard deduction
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Repeals the limitation on federal income tax deductions for personal casualty losses, restoring the ability for taxpayers to deduct losses from disasters, theft, and other casualties.
Policy Domains
Legislative Strategy
"Restore pre-2018 tax treatment of casualty losses by removing TCJA limitation, allowing taxpayers to deduct losses from non-federally-declared disasters"
Likely Beneficiaries
- Homeowners in disaster-prone areas (wildfires, floods, hurricanes)
- Victims of theft or property damage in non-federally-declared events
- Middle-to-upper income taxpayers who itemize deductions
- Residents of California and other states with frequent wildfires not always receiving federal disaster declarations
Likely Burden Bearers
- U.S. Treasury (reduced tax revenue)
- Federal taxpayers collectively (increased deficit or tax burden elsewhere)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "irs"
- → Internal Revenue Service
- "the_secretary"
- → Secretary of the Treasury
Key Definitions
Terms defined in this bill
The section governing personal casualty loss deductions, which currently contains paragraph (5) limiting such deductions to federally declared disasters
The provision being repealed, which limits personal casualty loss deductions to losses attributable to federally declared disasters (added by Tax Cuts and Jobs Act of 2017)
Losses of personal property from fire, storm, shipwreck, theft, or other casualty that are deductible from federal income tax
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