In a bipartisan effort to support homeowners recovering from natural disasters, U.S. Senators Bill Cassidy (R-LA), Thom Tillis (R-NC), Alex Padilla (D-CA), and Adam Schiff (D-CA) introduced the Disaster Mitigation and Tax Parity Act of 2025.
The legislation aims to provide tax relief to Americans who receive state-based catastrophe mitigation payments, helping them rebuild and strengthen their homes against future disasters.
The bill allows homeowners to exclude qualified catastrophe mitigation payments from their taxable income. These payments, made under state-based programs, are designed to fund improvements that reduce damage from floods, hurricanes, wildfires, earthquakes, and other natural disasters.
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By offering this tax exemption, the legislation seeks to encourage homeowners to invest in disaster-resilient upgrades without facing additional financial burdens.
“Louisianans understand the impact of devastating storms, but with the help of state and local programs, we have tools to rebuild and return to wholeness,” said Senator Cassidy, a leading advocate for disaster recovery. “If communities need tax relief, let’s give it to them!”
Senator Tillis emphasized the importance of proactive measures to mitigate the effects of natural disasters.
“This commonsense legislation takes a critical step toward empowering individuals and communities to better protect themselves from the devastating effects of natural disasters like Hurricane Helene,” he said. “By excluding qualified catastrophe mitigation payments from income tax, we are incentivizing property owners to make the necessary improvements that reduce damage and save lives. This proactive approach not only helps families rebuild faster but strengthens our resilience in the face of future disasters.”
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“The devastating fires in Southern California underscored the urgent need to empower homeowners to take proactive steps to keep their families and homes safe,” he said. “As these disasters become more frequent and more extreme due to the climate crisis, we should incentivize—not penalize—taxpayers for protecting their homes. That’s why the Disaster Mitigation and Tax Parity Act would provide a tax exemption on payments from state-based programs for homeowner investments in critical disaster-related improvements.”
Senator Schiff stressed the importance of bipartisan collaboration in addressing the aftermath of natural disasters. “We have seen how natural disasters have devastated communities around the country, and we must ensure we have the resources and programs in place to respond,” he said. “Homeowners should not face additional taxes for wanting to protect their homes, and our bipartisan legislation will provide the needed tax relief to help affected Americans recover from these disasters.”
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The Disaster Mitigation and Tax Parity Act of 2025 defines a qualified catastrophe mitigation payment as any amount received for making improvements to an individual’s property for the sole purpose of reducing damage caused by:
- Floods
- Windstorms
- Earthquakes
- Wildfires
By excluding these payments from taxable income, the bill aims to make it easier for homeowners to access state-based programs and invest in disaster-resilient upgrades.
The legislation has garnered support from a diverse group of senators, reflecting its broad appeal across party lines. In addition to Cassidy, Tillis, Padilla, and Schiff, the bill is cosponsored by:
- John Hickenlooper (D-CO)
- Katie Britt (R-AL)
- Michael Bennet (D-CO)
- Jeff Merkley (D-OR)
- Amy Klobuchar (D-MN)
- John Kennedy (R-LA)
- Roger Wicker (R-MS)
- Ted Budd (R-NC)
By providing tax relief to homeowners who invest in disaster mitigation, the bill not only aids in recovery but also encourages proactive measures to reduce future damage.
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