A bill has been signed by President Biden that ends the practice of the IRS taxing the settlements awarded to the victims of large wildfires. The “Protect Innocent Victims of Taxation After Fire Act” was sponsored by Doug LaMalfa and is part of the “Federal Disaster Tax Relief Act” signed into law on Thursday. It allows tax exemptions on a range of wildfire-related losses. It works retroactively, allowing refunds on taxes paid on wildfire settlements going back to 2020. Around $512 Million is expected to be returned to wildfire survivors.
-Steve Gibson