# Plain Language Summary: Federal Disaster Tax Relief Act of 2023

This bill gives tax breaks to people who've suffered losses from major disasters, specifically wildfires and the East Palestine train derailment. The main idea is to help disaster victims by letting them exclude certain compensation payments from their taxable income, which means they won't have to pay federal income taxes on money they receive to cover their losses.

For wildfire victims, if you receive money from the government or other sources to cover expenses or property damage from a federally declared wildfire disaster, you won't have to count that money as income on your taxes. This applies to any wildfire disaster declared after the end of 2014, and the tax break is available through the end of 2025. The catch is that this only works for losses that aren't already covered by insurance—you can't use this to avoid taxes on money you're getting from your insurance company. Also, you can't claim a tax deduction for the same expenses you're getting compensated for, and you can't increase the value of your property on your tax records based on this compensation.

For people affected by the East Palestine train derailment in Ohio on February 3, 2023, the bill treats compensation payments similarly. If you received money from the government, Norfolk Southern Railway (the railroad company), or related parties to cover losses, damages, property value decreases, or other expenses from the derailment, that money is tax-free. This covers a wide range of impacts, including loss of property value and the costs of selling a home in the affected area.

Federal Disaster Tax Relief Act of 2023

Federal Disaster Tax Relief Act of 2023 This bill extends rules for the treatment of certain disaster-related personal casualty losses and provides tax relief for losses due to wildfires and a certain incident involving a train derailment. Specifically, the bill excludes from taxpayer gross income, for income tax purposes, any amount received by an individual taxpayer as compensation for expenses or losses incurred due to a qualified wildfire disaster (a disaster declared after 2014 as a result of a forest or range fire). It also excludes relief payments for losses resulting from the East Palestine, Ohio, train derailment on February 3, 2023.