A new disaster tax relief law lets people deduct casualty losses from presidentially declared major disasters without itemizing. It covers storm damage to homes, cars, and belongings in disasters that begin before January 1, 2027, starting with 2025 tax returns.
The law is H.R. 5366, the Doug LaMalfa Federal Disaster Tax Relief Certainty Act. Sen. Rick Scott's office says President Trump signed it on September 11, 2026. For casualty losses, the enrolled bill text published by the U.S. Government Publishing Office amends two tax code sections, 165(h) and 63(b).
For Florida readers, one fact comes first. As of September 18, FEMA's records show no major disaster declared in Florida for any storm that began in 2025 or 2026. So the first question is not how much you can deduct. It is whether your county is in a declaration at all.
H.R. 5366 covers personal casualty losses from major disasters declared by the President, when the incident period begins before January 1, 2027. Those losses skip the 10 percent of income cut. They carry a $500 floor per casualty, and people who take the standard deduction can claim them. The rules start with tax years beginning after December 31, 2024. They cover personal property only, not business or rental property. With no Florida major disaster declared so far for a 2025 or 2026 storm, the law matters most for the rest of this hurricane season.
What the disaster tax relief law changes
Under the regular rules, a personal casualty loss takes two cuts. IRS Topic 515 says you subtract $100 from each casualty, then subtract 10 percent of your adjusted gross income (AGI). What is left is an itemized deduction on Schedule A.
The enrolled bill text sets different rules for what it calls qualified disaster-related personal casualty losses. It also adds the loss to section 63(b), the list of what people who take the standard deduction can subtract.
| Rule | Regular personal casualty loss | Qualified disaster loss under H.R. 5366 |
|---|---|---|
| Which events | Federally declared disasters, including emergency declarations; from 2026, state-declared disasters too, per the IRS | Major disasters declared by the President, incident period beginning before January 1, 2027 |
| Floor per casualty | $100 | $500 |
| 10 percent of AGI reduction | Applies | Does not apply |
| Filers who take the standard deduction | Cannot claim it; it is an itemized deduction | Can claim it on top of the standard deduction |
The changes apply to tax years beginning after December 31, 2024. For most people, that means 2025 returns and later.
Which disasters qualify for the new casualty loss rules
The law covers losses in an area where the President declared a major disaster under section 401 of the Stafford Act. The incident period, as FEMA sets it, must begin on or after December 28, 2019, and before January 1, 2027. The loss has to arise in that area and be caused by that disaster.
What is new is the window. The IRS instructions for the 2025 Form 4684 were written before this law. They limit the special rules to major disasters declared from January 1, 2020, through September 2, 2025. Those disasters also had to begin by July 4, 2025, and end by August 3, 2025. The new law drops the declaration and end dates and moves the start date out to December 31, 2026.
Two limits are easy to miss. An emergency declaration alone does not qualify, because the law requires a major disaster declaration. And a storm whose incident period begins in 2027 falls outside the law.
Does Florida storm damage from 2025 or 2026 qualify?
FEMA's declarations data, refreshed September 18, 2026, shows Florida's latest major disaster declarations were for Hurricane Milton in October and November 2024. It shows no major disaster or emergency declaration for Florida since. The IRS disaster relief page, updated September 16, also lists nothing for Florida after Milton.
The law can still matter to a Florida reader in three ways:
A storm later this season
The Atlantic hurricane season runs through November 30, according to the National Hurricane Center. A major disaster whose incident period begins before January 1, 2027, is covered.
Property in another state
The rule follows where the loss happens. Personal property damaged in a declared area elsewhere can qualify.
A loss that lands in a later year
Publication 547 says that while an insurance claim has a reasonable prospect of recovery, that part of the loss is not yet sustained. A Hurricane Milton loss can land in 2025 that way, so ask your CPA which year yours belongs to.
Storm damage with no federal declaration is a different story. For 2025, Publication 547 says personal casualty losses are deductible only when caused by a federally declared disaster, with a narrow exception. For 2026, an IRS page updated September 15 says state-declared disasters can also count. The new $500 and no-itemizing rules do not reach those losses.
What "without itemizing" means in dollars
Publication 547 and the Form 4684 instructions show the mechanics. You write your standard deduction and your net qualified disaster loss next to line 16 of Schedule A. Then you carry the combined total to Form 1040. You are not itemizing. You are adding one number to the standard deduction.
Here is an illustration. The IRS sets the 2026 standard deduction for a married couple filing jointly at $32,200. Say a hurricane hits their county and the President declares a major disaster. Their loss on a car and furniture, after insurance and figured under IRS rules, comes to $12,000.
Under H.R. 5366: $12,000 minus the $500 floor leaves $11,500. Their total deduction becomes $43,700.
Under the regular rules: with $90,000 of AGI, $12,000 minus $100 is $11,900. The 10 percent rule takes $9,000, leaving $2,900 that counts only if they itemize.
Unless their other itemized deductions top $29,300, the standard deduction is the better choice, and the storm adds nothing.
What a deduction saves depends on your tax bracket. For 2025 returns, the IRS standard deduction is $31,500 for joint filers, $15,750 for single filers, and $23,625 for heads of household.
Personal property versus business or rental property
The new rules cover losses under section 165(c)(3). IRS Topic 515 describes these as losses not connected to a trade or business or a transaction entered into for profit.
Business and rental property sit in a different bucket. Publication 547 says losses on business and income-producing property are not subject to the personal-use limits. When that property is completely destroyed, the loss is your adjusted basis minus salvage value and any insurance or other reimbursement.
Property used both ways gets split. A home with a rental unit is the IRS example: the personal part goes in Section A of Form 4684 and the rental part in Section B. Publication 547 also warns that a loss on a home you used for business or rented out may be limited.
| Personal-use property | Business or rental property | |
|---|---|---|
| Examples | Your home, household items, and vehicles | Rental units, business equipment, and inventory |
| Where it goes on Form 4684 | Section A | Section B |
| Floor and 10 percent rule | Apply, with a $500 floor for qualified disaster losses | Do not apply |
| Covered by H.R. 5366 | Yes, for qualified disasters | No |
Businesses, including corporations, S corporations, and partnerships, can also elect to claim a disaster loss in the prior year, according to Publication 547.
Records to keep after storm damage
Publication 547 lists what you should be able to show. You owned the property. You know what the casualty was and when it happened. It directly caused the loss. And you know whether a reimbursement claim is still open.
The loss is the smaller of your adjusted basis or the drop in fair market value, minus insurance and other reimbursement. So records of what you paid matter as much as damage photos. If the property is insured, file a timely claim. Publication 547 says that without one, only the part the policy does not cover is deductible.
Measuring the drop in value usually takes an appraisal. Repair costs can serve as the measure if they meet five conditions in Publication 547, including that the repairs are actually made and fix only the damage. Revenue Procedure 2018-08 adds safe harbor methods, including one based on your insurance company's loss report.
- Photos of the damage and of the repaired property, which Publication 547 says help show condition and value
- Purchase records and improvement receipts that show what you paid
- Repair estimates, signed contracts, and paid invoices
- Your insurance claim, the adjuster's report, and every payment or denial letter
- FEMA grant letters, because a loss a Stafford Act grant specifically reimbursed is not deductible
- The FEMA declaration number for the disaster, which goes above line 1 of Form 4684
When amending a 2025 return may be worth asking a CPA about
Three situations are worth raising with your CPA:
A 2026 storm and the prior-year election
Publication 547 lets a federally declared disaster loss, in an area warranting public or individual assistance, go on the prior year's return or amended return. For a 2026 storm, that is your 2025 return. The election is due 6 months after the disaster-year return's regular due date, without extensions. For example, the IRS puts the deadline for moving a 2025 loss to a 2024 return at October 15, 2026.
A 2025 return filed under the old instructions
The 2025 Form 4684 instructions predate the law. If you had a 2025 loss in a declared area the new window now covers, ask whether amending makes sense.
A return still on extension
The IRS says an extension gives you until October 15 to file. If your 2025 return is not filed yet, ask now.
As of September 18, the IRS page for Form 4684 lists no update for this law, and the IRS posts later changes at IRS.gov/Form4684. Confirm with your CPA before you file or amend.
Our hurricane season guide for Florida small businesses covers the rest of storm prep. For the return itself, see our individual income tax preparation and tax planning services.
Questions about the disaster tax relief law
It is H.R. 5366, signed September 11, 2026, according to Sen. Rick Scott's office. It changes sections 165(h) and 63(b) of the tax code for personal casualty losses from major disasters that begin before January 1, 2027.
Yes, if it is a qualified disaster loss, starting with 2025 returns. Your net loss is added to your standard deduction instead of being itemized.
Per casualty. The law puts the $500 in the per-casualty rule of section 165(h)(1). Publication 547 says one reduction applies to each event, however many items were damaged.
No. It covers personal casualty losses under section 165(c)(3). Business and rental losses go in Section B of Form 4684 and follow different rules.
Not as of September 18, 2026. FEMA's data shows no major disaster or emergency declaration for a Florida storm that began in either year. Check FEMA's declarations page for your county before you count on the new rules.
Sources
- U.S. Government Publishing Office, H.R. 5366 enrolled bill, Doug LaMalfa Federal Disaster Tax Relief Certainty Act, 119th Congress. https://www.govinfo.gov/content/pkg/BILLS-119hr5366enr/html/BILLS-119hr5366enr.htm
- Office of U.S. Sen. Rick Scott, President Trump Signs Sen. Rick Scott's Disaster Tax Relief Bill into Law, September 11, 2026. https://www.rickscott.senate.gov/2026/9/president-trump-signs-sen-rick-scott-s-disaster-tax-relief-bill-into-law
- Internal Revenue Service, Topic no. 515, Casualty, disaster, and theft losses. https://www.irs.gov/taxtopics/tc515
- Internal Revenue Service, Publication 547 (2025), Casualties, Disasters, and Thefts. https://www.irs.gov/publications/p547
- Internal Revenue Service, Instructions for Form 4684 (2025), Casualties and Thefts. https://www.irs.gov/instructions/i4684
- Internal Revenue Service, About Form 4684, Casualties and Thefts. https://www.irs.gov/forms-pubs/about-form-4684
- Internal Revenue Service, Casualty loss deduction expanded and made permanent, updated September 15, 2026. https://www.irs.gov/forms-pubs/casualty-loss-deduction-expanded-and-made-permanent
- Internal Revenue Service, IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill. https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
- Internal Revenue Service, Tax relief in disaster situations, updated September 16, 2026. https://www.irs.gov/newsroom/tax-relief-in-disaster-situations
- Internal Revenue Service, Get an extension to file your tax return. https://www.irs.gov/filing/get-an-extension-to-file-your-tax-return
- Federal Emergency Management Agency, OpenFEMA Disaster Declarations Summaries, Florida records, retrieved September 18, 2026. https://www.fema.gov/api/open/v2/DisasterDeclarationsSummaries?$filter=state%20eq%20%27FL%27
- National Hurricane Center, Tropical Cyclone Climatology. https://www.nhc.noaa.gov/climo/
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