Palmetto Plain

Federal · H.R. 5366, Public Law 119-108

Disaster tax relief law extends the special casualty-loss deduction to disasters through 2026, including SC's January 2026 winter storm

Signed Sept. 11, 2026

Published · Last updated

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The short version

  • Before this law, special tax treatment for "qualified disaster-related personal casualty losses" covered only major disasters with incident periods that began by July 4, 2025. This law extends it to disasters whose incident periods begin before January 1, 2027.
  • For these losses, you don't need to clear the usual 10%-of-income floor, there is a $500 per-casualty threshold, and you can claim the loss even if you take the standard deduction.
  • FEMA's records show a major disaster declaration for South Carolina's January 21-27, 2026 severe winter storm (DR-4908), whose incident period falls in the newly covered window.
  • The law also permanently writes into the tax code an exclusion from income for qualified wildfire relief payments, for wildfire disasters declared from 2015 through 2026.
Status
Signed into law Sept. 11, 2026 as Public Law 119-108. The casualty-loss changes apply to tax years beginning after Dec. 31, 2024.
Official source
Congress.gov: H.R.5366, Doug LaMalfa Federal Disaster Tax Relief Certainty Act (Public Law 119-108)
Enrolled bill text

What it does

  • Extends the disaster window. A “qualified disaster area” is any area with a presidential major disaster declaration “if the incident period ... begins on or after December 28, 2019, and before January 1, 2027.” (Enrolled text, sec. 2(a), new IRC §165(h)(6)(C)(ii)) Under prior law, the incident period had to begin by July 4, 2025. (CRS summary)
  • No 10% of income floor. Normally personal casualty losses are deductible only to the extent they exceed 10% of adjusted gross income. A “qualified net disaster loss” is added on top of that and isn’t subject to the 10% floor. (Enrolled text, new §165(h)(6)(A))
  • $500 threshold. The per-casualty reduction is $500 for qualified disaster-related losses, instead of $100. (Enrolled text, sec. 2(b))
  • Works with the standard deduction. The qualified net disaster loss is added to the standard deduction for people who don’t itemize. (Enrolled text, sec. 2(c))
  • Wildfire payments. A new IRC section 139M excludes qualified wildfire relief payments from income for federally declared forest or range fire disasters declared after 2014 and before 2027, for payments received in tax years after 2025. (Enrolled text, sec. 3)

Who it affects

Individuals with unreimbursed losses to personal property, such as homes and vehicles, from a presidentially declared major disaster. FEMA lists a major disaster declaration for South Carolina’s severe winter storm of January 21–27, 2026 (DR-4908, declared April 7, 2026). Its incident period began after July 4, 2025, so it falls in the window this law adds. (FEMA disaster declarations; enrolled text) Losses from earlier SC disasters, such as Hurricane Helene in 2024 (DR-4829), were within the earlier window. (FEMA; CRS summary)

What it means for you

If you had uninsured losses from a qualifying disaster, you may be able to deduct them under these rules even if you take the standard deduction. The changes apply to tax years beginning after December 31, 2024. Ask a tax professional, or watch for IRS forms and instructions. (Enrolled text, sec. 2(d))

How it passed

The House passed it by voice vote on April 27, 2026, and the Senate by unanimous consent on August 7, 2026. It was signed September 11, 2026. Rep. Joe Wilson (SC-2) was a cosponsor. (Congress.gov actions and cosponsors)

Current status

Law since September 11, 2026 (Public Law 119-108). (Congress.gov)

Sources

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Every statement above is drawn from the official source text linked here; section references are shown in grey. This is a plain-English summary, not legal advice. Spot an error? Tell us.