Protecting Homeowners from Disaster Act of 2023 This bill repeals the current limitation on tax deductions for personal casualty losses. Under current law, such losses are deductible in taxable years 2018-2025 only to the extent that they are attributable to a federally declared disaster.
If enacted, the repeal of the limitation on casualty loss deductions will significantly enhance tax relief for homeowners affected by various disasters, regardless of whether those disasters are federally recognized. This change could have a meaningful impact on homeowners who might suffer losses due to non-federally declared events, providing them with a financial cushion to recover more efficiently from personal property damages. This could encourage stronger disaster recovery efforts on a personal level and support local economic resilience in the aftermath of such events.
House Bill 318, titled the 'Protecting Homeowners from Disaster Act of 2023,' seeks to amend the Internal Revenue Code of 1986 by repealing the current limitation on deductions for personal casualty losses. This initiative aims to provide more comprehensive tax relief to homeowners who face property damage due to disasters. Under existing law, individuals could only claim deductions for these losses when they were related to federally declared disasters and were limited in their claim period to taxable years ranging from 2018 to 2025. By eliminating this limitation, HB318 intends to broaden the eligibility for tax relief directly linked to such losses.
There may be contention surrounding the financial implications of the bill on federal tax revenue, as eliminating these limitations could lead to increased claims and reduced tax income for the government. Opponents might argue that without a limit on the deductions, the government could face an unsustainable financial burden, especially if disasters occur frequently in non-declared settings. Proponents, however, would counter that the bill fosters a necessary support system for affected families and individuals, potentially reducing long-term reliance on government assistance by allowing households to recover more fully from disaster-related losses.