Oregon — U.S. Rep. Janelle Bynum of Oregon joined a bipartisan group of lawmakers in introducing legislation that would exempt wildfire disaster relief payments from federal income taxation.
The proposal, titled the Doug LaMalfa Protect Innocent Victims of Taxation After Fire Extension Act, would extend provisions in the Federal Disaster Tax Relief Act of 2023. The bill would ensure that compensation received by wildfire victims—such as funds covering living expenses, lost wages, personal injury, death, or emotional distress—is excluded from taxable income through 2032.
Bynum said the measure is intended to ensure that survivors rebuilding after catastrophic fires do not face additional financial burdens from federal taxes on relief funds.
“When wildfire survivors are trying to rebuild after a massive tragedy, the federal government shouldn’t be taking a cut of their relief,” Bynum said in a statement announcing the bill.
The legislation is sponsored by a bipartisan group of representatives including Vince Fong, Tom McClintock, Brad Sherman, Mike Thompson, Blake Moore, Cliff Bentz, and Jill Tokuda. Lawmakers from several Western states emphasized that communities frequently affected by wildfires often rely on settlement funds and disaster aid to recover.
Rep. Cliff Bentz, whose district covers much of eastern Oregon, said the extension would continue protections adopted in recent federal tax policy changes. Without the measure, wildfire relief payments could again be subject to federal income tax.
Supporters say the bill is intended to provide financial certainty for disaster survivors as they rebuild homes, replace lost income, and recover from fire-related losses.
If enacted, the legislation would continue federal tax exemptions for wildfire recovery payments for victims of qualified wildfire disasters through the end of 2032.
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