Federal Disaster Tax Relief Act Of 2023 Is In Effect

On Dec. 12, 2024, President Biden signed the Federal Disaster Tax Relief Act of 2023 into law.  One of the provisions within this bill is the reinstatement of a provision that eliminates the requirement that a qualified disaster-related personal casualty loss exceed 10 percent of an individual’s adjusted gross income (AGI). The casualty loss can be claimed even if an individual claims the standard deduction.

Previously, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 modified the rules for the deductibility of personal casualty losses in qualified disaster areas by removing the requirement that the personal casualty loss exceeded 10 percent and just required the loss to exceed $500 for any loss in a qualified disaster area after Jan. 1, 2018, through Dec. 31, 2019.

The passage of the bill allows individuals who claimed casualty losses related to federally declared disasters between 2021 and 2024 (or any year where the statute of limitations is open after Jan. 1, 2018) such as Hurricanes Ian and Helene to file amended returns. See IRS.gov/DisasterTaxRelief for date-specific declarations associated with these disasters and for more information.

Contact A Tax Professional

If you experienced a qualified disaster area casualty loss and need help analyzing whether you qualify for this benefit, contact the tax and business advisory services team at GBQ today for assistance.


By Kevin Dunn, CPA, director, tax & business advisory services

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