By David Lightman
McClatchy Washington Bureau
(TNS)
Republicans and Democrats in Congress may be far apart on spending and tax cuts, but they’re working together to try to provide tax breaks for disaster victims.
Their efforts have been motivated by the devastating wildfires in the Los Angeles area, which killed 29 people and destroyed thousands of homes.
Much of the proposed tax breaks involve taking steps to prevent damage from future fires, floods and other catastrophic events anywhere that’s disaster-prone. Much of the current tax help for disaster victims are available after the fire, hurricane or other incident has occurred.
But the new breaks would be preventive and could “help greatly mitigate the extent of potential damages and impacts,” said Miklos Ringbauer, founder and principal of MiklosCPA Inc., a Southern California accounting firm.
Whether the relief will come anytime soon is questionable. The Senate on Wednesday began considering next year’s federal budget, but final passage of any specifics remains a long way off.
Tax break proposals
Among tax relief efforts by California lawmakers:
A 25% tax credit, up to $25,000, for taking steps to protect one’s home against wildfires. The credit would increase by the rate of inflation each year.
Rep. Kevin Kiley, R-Roseville, is the chief sponsor. He said he wants to “strengthen home protections that prevent the damage in the first place.”
The legislation cites several examples of what could qualify. It lists roof coverings, sheathing, flashing, roof and attic vents, eaves, or gutters that “conform to ignition-resistant construction standards.” Also mentioned are “wall components for wall assemblies” that meet such standards, as well as exterior walls, doors, windows, deck or fence components, among other items.
A 30% tax credit for mitigation activities of farmers, businesses and individuals. This plan would also establish a grant program for people in disaster-prone areas.
They’d be eligible for up to $10,000 for certain hazard prevention work on their homes. They could also use the tax credit, if eligible, if their cost was well above the grant amount.
A big motivation for the bill is to help people having difficulty getting insurance payments for disaster-related catastrophes.
“Property insurance has quickly become one of the single-biggest issues I hear about in my district,” said Rep. Mike Thompson, D- Woodland. “People can’t get covered — either the available options are completely unaffordable, or there are no options available at all. It’s an untenable situation,”
Rep. Doug LaMalfa, R-Chico, is teaming with Thompson to push the bill.
A federal tax exemption on rebates homeowners get from state-based programs when they disaster-proof their homes. No specific limit is mentioned in the bill, which applies to any programs administered by states and local water authorities.
The bill is proposed by Sens. Adam Schiff, D-Calif., Alex Padilla, D-Calif., and Thom Tillis, R-N.C., who represents a state battered by Hurricane Helene last fall.
It’s unclear where any of these proposals will land.
No one can say with certainty but they are hopeful that the partisan bickering that’s dominated Washington debate will subside on the disaster tax relief issue.
Sen. Ron Wyden, D-Oregon, the top Democrat on the tax-writing Senate Finance Committee, is trying to build a coalition to help get relief.
It would be an alliance “between the West and the South and the Midwest because the West has got fires, the South has got hurricane and the Midwest has got all kinds of things,” Wyden said.
That relief, he said, “is a huge deal for us in the West.”
Photo caption: A house completely consumed by fire highlights the destructive force of the Palisades Fire on Jan. 8, 2025, in Los Angeles. (Alamy Stock Photo)
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©2025 McClatchy Washington Bureau. Visit mcclatchydc.com. Distributed by Tribune Content Agency LLC.
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