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Sen. John Kennedy (R-La.) today introduced the Claiming Losses After Disasters Act to help disaster victims receive tax deductions following damage caused by natural disasters.
“In 2021, historic flooding, Hurricane Ida and a devastating winter storm all hit Louisiana families—and the year isn’t even over. Unfortunately for every Louisianian trying to rebuild, current law limits tax deductions for natural disaster victims. I introduced the Claiming Losses After Disasters Act to help more Louisianians defray the costs of rebuilding,” said Kennedy.
This year’s historic winter storm caused $20.8 billion in damage to Louisiana. Rainfall and flooding caused $1.4 billion in damage. Hurricane Ida caused an estimated $64.5 billion in damage. The combined damage from all of these disasters totals roughly $86.7 billion.
Under current law, tax deductions for casualty losses are limited to disaster victims until the end of 2025. For someone to qualify for tax deductions, however, the casualty losses suffered must be more than the sum of 10 percent of an individual’s adjusted gross income and $100.
The Claiming Losses After Disasters Act would allow disaster victims from a major federally-declared disaster to claim a larger tax deduction for damages not covered by insurance. Specifically, Kennedy’s bill would permanently waive the requirement that disaster-related casualty losses must exceed 10 percent of a victim’s adjusted gross income for tax deductions to apply. Instead, a new minimum threshold of $500 in losses per disaster would apply before a person could receive a tax deduction.
Text of the Claiming Losses After Disasters Act is available here.
