Disaster Mitigation and Tax Parity Act of 2025

Source of recordUS Congress · congress.govLast synced Jul 9, 2026

Chamber

Senate

Progress

Where this bill stands in the legislative process.

Introduced
Passed Senate
Passed House
To President
Became Law

Overview

This bill aims to provide tax relief to homeowners by excluding payments received from state programs designed to mitigate disaster losses from their gross income. Specifically, it allows individuals to exclude amounts received for making property improvements intended to reduce damage from events like windstorms, earthquakes, floods, or wildfires, as long as these payments come from a designated state program. The bill also clarifies that these payments won't increase the property's tax basis.

Key provisions

Excludes payments from state catastrophe loss mitigation programs from gross income.
Payments must be for property improvements to reduce damage from windstorms, earthquakes, floods, or wildfires.
The state program can be established by a state, a joint powers authority, or a state-regulated insurance entity.
Payments do not increase the property’s tax basis.
The exclusion applies to payments received after December 31, 2021.
Individuals can claim the exclusion through amended returns.

Who is affected

Homeowners
State governments
Insurance companies
Taxpayers
Property owners

Notable changes

Expands the existing tax exclusion for disaster relief payments to include payments from state-based programs.
Clarifies the types of improvements eligible for the exclusion.