Disaster Tax Breaks—Finally—Head for Biden’s Approval
Senate passes long-stalled legislation to aid hurricane and other disaster victims from past four years
WALL STREET JOURNAL — A long-stalled set of tax breaks for natural-disaster victims is headed to President Biden’s desk, promising relief for people who suffered property damage from hurricanes, wildfires and other disasters.
The Senate passed the bill without opposition late Wednesday, following a 382-7 House vote in May. The $4.9 billion legislation would aid disaster victims from events as far back as December 2020. And the bill would offer tax breaks to people affected by recent hurricanes, including those in Florida and North Carolina.
The key provision would let disaster victims deduct casualty losses exceeding $500, instead of only being allowed to deduct losses above 10% of adjusted gross income under the tax law that would otherwise apply. They could take those tax deductions atop the standard deduction instead of needing to itemize to claim them.
The bill would also let people exclude from income certain payments received due to wildfires since 2014 or due to last year’s train derailment in East Palestine, Ohio.
“I applaud the Senate for putting this relief within arm’s reach for Floridians. We’re talking about hundreds of millions of dollars in Floridians’ pockets,” said Rep. Greg Steube (R., Fla.), who has been working on the issue since Hurricane Ian hit his district in 2022 and employed a rarely used parliamentary technique to advance the bill earlier this year.
The disaster tax provisions were part of a larger bipartisan tax deal between House Republicans and Senate Democrats earlier this year. That bigger legislation would have revived expired business tax breaks, expanded the child tax credit and cut off claims for the employee retention tax credit, a pandemic-era program that officials say is riddled with fraud and ineligible claims.
But Senate Republicans blocked that bill, citing concerns about the child-credit expansion and arguing they could do better if they gained the majority in the election. During that impasse, Steube filed a discharge petition, an end-run around House leadership, and he got the disaster-tax bill through the full House in May.
Senate Democrats were unwilling earlier this year to break up the broader tax bill but decided after the election to advance the disaster measure on its own.
