The U.S. Senate passed the Federal Disaster Tax Relief Act (H.R. 5863). In addition to providing much needed relief to victims of hurricanes, the legislation would provide tax relief for cattle producers who received payments due to wildfires according to a NCBA news release. Previously, payments counted as taxable income, meaning producers who already suffered from disasters were hurt again by having their relief payments taxed.
“It is heart breaking to see your farm or ranch destroyed by a disaster and it only adds to the pain when the payments meant to help you recover come with a tax bill,” said NCBA President and Wyoming rancher Mark Eisele. “With the devastating hurricanes and wildfires the cattle industry has suffered over the past several years, helping producers recover and stay in business is a top priority for NCBA. The Federal Disaster Tax Relief Act will prevent recovery payments from being taxed and be another tool for producers rebuilding their livelihood.”
The Federal Disaster Tax Relief Act addresses limitations in casualty losses and allows producers to take greater deductions for disaster related losses. Additionally, the bill excludes any payments received due to a “qualified wildfire disaster” from being counted as income for federal tax purposes. The bill also retroactively applies to any wildfire payments received in tax years 2020 through 2025. Producers will have the opportunity to file with the Internal Revenue Service (IRS) for relief payments received in these previous years.
“NCBA has fought to exempt disaster relief payments from being taxed and we are thankful that the House of Representatives and Senate both passed the Federal Disaster Tax Relief Act to protect these payments from taxation,” said NCBA Executive Director of Government Affairs Kent Bacus. “We also thank Congressman Greg Steube (R-FL) for leading the effort to get this bill passed. Now, NCBA urges President Biden to swiftly sign this bill into law.”
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NCBA
