On December 12, 2024, President Biden signed the “Federal Disaster Tax Relief Act of 2023”, Public Law 118-148.

As a part of this act, no matter how you filed your individual tax return, taxpayers will qualify for a tax deduction on disaster area storm damage to their primary residence. This is effective in disaster areas during the period beginning on January 1, 2020, and appears to end on January 11, 2025. A “qualified disaster area loss” is the casualty loss amount reduced by $500.

The IRS has not yet announced how to show this on amended returns, or on the current year’s return. At this point, we know taxpayers will be required to first file insurance claims, and then maintain reimbursement records and payment receipts to determine the net loss.