Wyden, Colleagues Introduce Bipartisan Bill to Extend Tax Relief for Wildfire Victims
U.S. Senator Ron Wyden announced today he has joined Senate colleagues to introduce legislation to help wildfire survivors in Oregon and nationwide.
The legislation would permanently ensure wildfire survivors are not taxed on compensation they receive for losses and damages suffered during a wildfire.
The Protect Innocent Victims of Taxation after Fire Extension Act would extend and make permanent the protections signed into law last year within the Federal Disaster Tax Relief Act, which excluded wildfire-related settlement payments from federal income tax calculations.
This includes payments that cover living expenses, lost wages, or compensation for injury, death, or emotional distress.
However, this exclusion is set to expire at the end of 2025. Failure to extend this provision means any wildfire-related settlement payments beginning in 2026 will again be subject to federal income tax obligations.
More and more states have qualifying settlements or active litigation related to wildfires. This bill would allow wildfire survivors to put the full amount of their settlement money toward recovering from devastating losses.
Additionally, the bill would allow victims to claim the exemption in the year they receive payments rather than to amend prior tax returns for a refund.
Posted on 12/10/25 1:48PM by Alex Bauer
